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 non-managerial 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.