The Power of a Special Majority of Shareholders, or of All Shareholders Acting Informally, to Override Directors — Att-Gen v. Ririnui

10 Pages Posted: 23 Sep 2015

See all articles by Peter G. Watts

Peter G. Watts

University of Auckland, Law Faculty

Date Written: September 21, 2015

Abstract

An important issue of corporations law is whether the shareholders of the company (or members of other sorts of corporation) can dictate to directors or the management committee on a particular matter, or override a management decision. The answer will often turn on the relevant incorporation statute. This article is concerned with the position under the standard company statutes used in such countries as the United Kingdom and New Zealand. It argues that under this longstanding model, shareholders can by special majority using the constitution, or otherwise by acting unanimously, dictate to and override directors on a management issue. The focus of the article is a recent decision of the New Zealand Court of Appeal, Att-Gen v. Ririnui (2015), currently under appeal to the Supreme Court.

Keywords: Corporations, companies, shareholder power, overriding directors, management decisions, unanimous assent, Duomatic, constitutional provisions

JEL Classification: D23, D70, D74, G30, G34, K10, K12, K22

Suggested Citation

Watts, Peter G., The Power of a Special Majority of Shareholders, or of All Shareholders Acting Informally, to Override Directors — Att-Gen v. Ririnui (September 21, 2015). Available at SSRN: https://ssrn.com/abstract=2663797 or http://dx.doi.org/10.2139/ssrn.2663797

Peter G. Watts (Contact Author)

University of Auckland, Law Faculty ( email )

Private Bag 92019
The University of Auckland
Auckland Central, 1142
New Zealand

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