100-member rule official repealed
After months of lobbying, legislation to repeal the “100-member rule” has been passed. According to the Governance Institute, the initiative will genuinely advance the Federal Government’s initiative to reduce red tape and save businesses thousands of dollars.
The “100-member rule” enabled just 100 shareholders to call a company general meeting, regardless of how may shareholders the company had. The company itself had to financially support the meeting, meaning large enterprises were often at a large financial loss. Special interest groups could also exploit the rule by calling an extraordinary general meeting (EGM) unless the company agreed to negotiate on marginal issues, even without 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.”
Ms Fox went on to say that repealing the 100-member rule would not disempower shareholders, as groups with 5 per cent of voting rights can still call an EGM. It is also still possible for groups of 100 members to put issues on the agenda for an annual general meeting (AGM) and for information regarding the issue to be distributed to members at the company’s expense.
“Shareholders continue to have avenues for brining 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.