Towards mandatory shareholder committees in Australian companies

A common objective in recent Australian and international corporate governance reform programs is the enhancement of shareholder participation. Active shareholder involvement brings account- ability to the board and management, and is appropriate considering that shareholders are the ultimate owners of the company. Curiously, however, while shareholder participation and representation has become a priority in the contemporary corporate governance arena, the bulk of recent governance reform initiatives operate on the assumption that there is a clear separation of the board and management from the general body of shareholders, and that this is necessary to achieve optimal performance. The requirement that directors be 'independent' of the company and its shareholders is a prime example. In this article, the authors propose the establishment of a mandatory shareholder committee in Australian companies as a way of enhancing shareholder participation and representation.]