By Will Heath and Ann-Kathrin Goller. King & Wood Mallesons’ Melbourne office.
Two recent cases have confirmed important corporate governance rules relating to shareholder consent to directors’ conduct and shareholders’ rights to remove directors.
First, the Storm case demonstrates that the unanimous consent and involvement by a company’s shareholders in the misconduct of its directors does not absolve the directors from a breach of their statutory duty to exercise reasonable care and diligence. The statutory duty requires a director to make an objective assessment of the rewards and risks that may follow for the company from a proposed course of action.
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