Opting out of shareholder governance rights: a new perspective on contractual freedom in Australian corporate law

McConvill, James and Bagaric, Mirko 2005, Opting out of shareholder governance rights: a new perspective on contractual freedom in Australian corporate law, DePaul business and commercial law journal, vol. 3, no. 2, Winter, pp. 255-319.

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Title Opting out of shareholder governance rights: a new perspective on contractual freedom in Australian corporate law
Author(s) McConvill, James
Bagaric, Mirko
Journal name DePaul business and commercial law journal
Volume number 3
Issue number 2
Season Winter
Start page 255
End page 319
Publisher DePaul University College and the Commercial Law League of America
Place of publication Chicago, Ill.
Publication date 2005
ISSN 1542-2763
Summary One of the classic debates in corporate law relates to whether the rules of corporate law are ar should be 'mandatory', in that companies must comply, or 'enabling' - meaning a set of default rules which companies have the choice of adopting or 'opting out' of through alternative contractual arrangements. The so-called 'mandatory/enabling' debate has been especially prominent in the United States fro numerous reasons, yet has also received some attention in Australia. That said, the extent to which companies can 'opt out' of corporate law has rarely been considered as a practical issue in Australia - particularly whether Australian companies can 'opt out' of provisions under the Corporations Act ("the Act"). However, just recently, two high-profile events in Australia have made 'opting out' of corporate law a relevant issue, especially the question of whether companies are free to 'opt out' of provisions of the Corporations Act  which provide express governance rights to shareholders. These events were Boral's constitutional amendment in 2003 to restrict the ability of shreholders to propose amendments to the company's constitution, and the contemplation and introduction of so-called 'pre-nuptial' agreements- designed to by-pass the right of shreholders to vote on removing directors in public companies. In the light of these two recent events, in this article the authors revisit the mandatory/enabling debate. However, rather than going over old ground as to whether a mandatory or enabling approach to corporate regulation is desirable, the authors approach the issue from a fresh perspective: that Australian Securitiesand Investments Commission's ("ASIC") existing relief powers under the Act should be extended to provide a means for companies to opt out of provisions containing shareholder governance rights.
Language eng
Field of Research 180105 Commercial and Contract Law
HERDC Research category C3 Non-refereed articles in a professional journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30013244

Document type: Journal Article
Collections: Faculty of Business and Law
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