The proper role of shareholders in the decision-making processes of modern large Australian public companies

Article


Mayanja, James. 2009. "The proper role of shareholders in the decision-making processes of modern large Australian public companies." Australian Journal of Corporate Law. 24 (1), pp. 9-32.
Article Title

The proper role of shareholders in the decision-making processes of modern large Australian public companies

ERA Journal ID37186
Article CategoryArticle
Authors
AuthorMayanja, James
Journal TitleAustralian Journal of Corporate Law
Journal Citation24 (1), pp. 9-32
Number of Pages24
Year2009
Place of PublicationSydney, Australia
ISSN1037-4124
Web Address (URL)http://www.lexisnexis.com.au/aus/products/catalog/current_htm/ajcl.asp
Abstract

Calls for increased shareholder intervention in the routine business operations of large Australian public companies should be reconsidered. Constant shareholder involvement in matters concerning the management of a company's the routine business affairs is likely to cause several intractable problems. Most shareholders do not have the information or skills necessary to make sound decisions on either operational or policy issues. In any event, given that they are a collection of individuals and groups of people with different, and often, irreconcilable interests, shareholder opinions are bound to differ as to which course will best serve the interest of a company. Increased shareholder intervention in operational issues thus poses the threat of a decline in the quality of corporate decision making. For these reasons, the management of the business affairs of large, complex companies should continue to be the primary responsibility of boards of directors. Directors are, more often than not, better informed about the long-term prospects and value of a company. Therefore, in order to maximise the value of public companies, shareholder participation in decision-making should continue to occur in limited circumstances, as a means of promoting the accountability of directors.

Keywordscorporate governance; separation of ownership and control; shareholder activism; shareholder welfare; social welfare
ANZSRC Field of Research 2020480103. Corporations and associations law
520402. Decision making
350799. Strategy, management and organisational behaviour not elsewhere classified
Public Notes

File reproduced in accordance with the copyright policy of the publisher/author.

Byline AffiliationsSchool of Law
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