- In 2014, the Australasian Centre for Corporate Responsibility (“ACCR”), which represented over 100 shareholders in the Commonwealth Bank of Australia (“CBA”), notified CBA that it proposed to move one of three alternate resolutions at CBA’s next Annual General Meeting (“AGM”). ACCR relied on the “100 member power” in the Corporations Act 2001 (Cth) (“the Act“).
- Two of ACCR’s proposed resolutions were framed to express an opinion on behalf of CBA’s shareholders that CBA’s directors should either provide a report to shareholders outlining environmental issues, or, alternatively, expressing shareholders’ concern that such a report was not included in CBA’s annual directors’ report.
- Another resolution proposed a form of a special resolution to amend CBA’s constitution to include a requirement that CBA’s annual report would disclose the amount of greenhouse gas emissions it was responsible for financing.
- CBA did not include either of the first two proposed resolutions in its AGM notice, and informed ACCR that they were “matters within the purview of the Board and management of the Bank …’, and accordingly were ‘not valid and capable of being legally effective“.
- CBA included the third proposed resolution in its notice of AGM together with its view that the resolution was not in the interests of shareholders and a recommendation that shareholders should vote against it.
- The Full Court of the Federal Court held that there was no basis to imply a term into the constitution of the Commonwealth Bank of Australia allowing members to make an advisory resolution to the board about how management reported on carbon emissions generated by projects funded by the CBA.
- Activist shareholders may not propose resolutions which usurp powers properly vested in the board to manage the company, unless a company’s constitution or the Act says otherwise.
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