Repeal of ‘100-member rule’ finally in force
Legislation to repeal the ‘100-member rule’ has finally received Royal Assent, bringing into effect a welcome initiative that will genuinely advance the Federal Government’s red tape reduction agenda, says Governance Institute of Australia.
The controversial rule allowed just 100 shareholders to call a company general meeting at significant cost to the majority of shareholders and was open to abuse by special interest groups who could threaten to call an extraordinary general meeting (EGM) unless the company negotiated on marginal issues even if they lacked majority shareholder support.
“For over a decade, Governance Institute has led a campaign against the ‘100-member rule’”, said Judith Fox, national director, policy of Governance Institute. “We are delighted that the rule has finally been buried and congratulate the government on introducing a measure that has widespread business support.
“It’s important to remember that repealing the 100-member rule does not disempower shareholders. Groups with five per cent of voting interests can still call an EGM. And it’s still possible for 100 members to put issues on the agenda of the annual general meeting (AGM) for debate, and to have information about those resolutions distributed to members at the company’s expense.
“Shareholders continue to have avenues for bringing matters to the attention of other members, without burdening the company and ultimately all shareholders with the considerable costs of holding a meeting on an issue in which only a minority believes. Repealing the 100-member rule delivers a fair outcome for everyone,” Ms Fox said.
For further information contact Viv Hardy at CallidusPR on 0411 208 951 or Judith Fox at Governance Institute of Australia on 0408 667 246.
About Governance Institute of Australia
Governance Institute of Australia is the only independent professional association with a sole focus on the practice of governance. We provide the best education and support for practising chartered secretaries, governance advisers and risk managers to drive responsible performance in their organisations.