Restraint of shareholder voice in Australia : Corporate governance, corporate law and politics

Shareholders’ right of expression is a fundamental right of oversight counterbalancing directors’ exercise of power. Companies are not simply economic institutions. They are also social institutions, organisations expressing values including expressions of political views. The views of the company ought to be the views of the members, and not simply another opportunity for directors to express their views as managers. In Australia, corporate political speech has been treated as an ordinary management function, despite its different nonmanagerial nature. The importance of the right of expression, generally, and the right of political expression, particularly, has been largely ignored, overlooked or otherwise diminished by law. Australian arrangements for the lodgement of shareholder resolutions allow much less scope for public disagreement about matters of corporate governance, strategy and political voice to be addressed in an open, contestable forum. This situation stymies a gradual, non-antagonistic approach and impinges the well-being and effective monitoring and functioning of Australian companies.

This article explores the development of the shareholders’ right of expression in Australia and other Anglophone countries. It shows that the ‘right of expression’, particularly the right of political expression, is lagging in Australia, especially after the 2016 decision of Australasian Centre for Corporate Responsibility v Commonwealth Bank of Australia. This article argues that advisory resolutions improve shareholder oversight and the accountability of company boards and provides greater legitimacy in terms of the right of political expression. Consequently, it advocates for reconsideration and reform. This analysis advances the debate and helps to recognise the deficiencies that exist in Australian corporate law with respect to shareholders’ rights.