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Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues

McConvill, James 2005, Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues, The corporate governance law review, vol. 1, no. 1, pp. 191-244.

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Title Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues
Author(s) McConvill, James
Journal name The corporate governance law review
Volume number 1
Issue number 1
Start page 191
End page 244
Publisher Sandstone Academic Press
Place of publication Melbourne, Vic.
Publication date 2005
ISSN 1449-9029
Summary Increasing attention is being given to the legal and governance issues relating to the removal of directors in Australian public companies. This has been due mainly to the difficulties experienced by the board of National Australia Bank in attempting to remove one of its fellow directors, and the subsequent development of public companies entering into so-called 'prenuptial agreements' with new directors, requiring that the director 'resign' if the board pass a vote of no-confidence in the director. In this article, the author revisits the area of director removal in Australian public companies for two reasons. The first reason, which covers the majority of the article, is to engage in a detailed analysis of whether the pre-nuptial agreements which some public companies have indicated that they support using to remove directors, are in fact enforceable under Australia's Corporations Act The second reason is to outline a law reform proposal to enable public companies to remove directors without requiring the vote of shareholders at a general meeting. The proposal involves providing Australia' corporate  regulator, the Australian Securities and Investments Commission (ASIC) with the power to grant relief from the statutory removal provisions to public companies, but in a way which balances the competing objectives of commercial efficiency and shareholder participation and, very importantly, encourages good corporate governance practices by companies in relation to the performance assessment  of directors.

It is in the interests of both shareholders and directors to agree on a set of ground rules for the effective supervision of companies that reconciles the rights of the owners to overall control with the much tougher demands on modern directors
Language eng
Field of Research 180109 Corporations and Associations Law
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2005, Sandstone Academic Press
Persistent URL http://hdl.handle.net/10536/DRO/DU:30003321

Document type: Journal Article
Collection: Law
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