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

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. ISSN 1037-4124


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.

Statistics for USQ ePrint 6329
Statistics for this ePrint Item
Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Published version supplied by and deposited with permission of the publisher.
Faculty / Department / School: Historic - Faculty of Business - School of Law
Date Deposited: 15 Feb 2010 06:01
Last Modified: 16 Feb 2015 03:33
Uncontrolled Keywords: corporate governance; separation of ownership and control; shareholder activism; shareholder welfare; social welfare
Fields of Research : 18 Law and Legal Studies > 1801 Law > 180109 Corporations and Associations Law
17 Psychology and Cognitive Sciences > 1702 Cognitive Sciences > 170202 Decision Making
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services

Actions (login required)

View Item Archive Repository Staff Only