Australia: A Rising Climate Of Shareholder Intervention - Lessons From ACCR v CBA

Last Updated: 7 August 2015
Article by Matthew Pokarier and Ben Di Marco

The relationship between shareholders and directors can often be troubled, particularly where there is disagreement on the management and performance of a company. Shareholder activism is growing and as a consequence the boundaries of shareholder capacity to influence directors are being constantly tested.

Directors, subject to the terms of a company's constitution, hold primary responsibility for management decisions and shareholders cannot influence or alter those powers, unless a right exists under the constitution or at law. This means that while shareholders have a significant commercial interest their ability to influence management can often be limited, and may lead to litigation risks and impact on the conduct of general meetings.


A recent example is the case of ACCR v CBA where a series of members' resolutions were proposed for the 2014 AGM, which would require CBA's directors to report on the amount of greenhouse gas emissions the company was responsible for financing.

Key findings of the case 

The Court found that

  1. The relationship between shareholders and directors is governed by the extent to which the constitution assigns powers to the directors, and the powers that are vested in the general body of shareholders;
  2. Where (such as in this case) the constitution provided that the business of the company was to be managed by or under the direction of the directors, the shareholders could not usurp the constitution by exerting a supervisory function at general meetings; and
  3. Shareholders are also unable to bring resolutions that expressed an opinion on management decisions, as even non-binding advisory resolutions are likely to be matters dealing with the business and management of the company.

The facts of the case 

The Australian Centre for Corporate Responsibility (ACCR) represented over 100 members of the Commonwealth Bank of Australia (CBA) who are entitled to vote at its AGM.  

On 4 September 2014, the ACCR under section 249N of the Corporations Act 2001 (Corps Act) put forward a number of proposed resolutions that:

  1. In the opinion of shareholders it was in the best interest of the company for directors to provide a report outlining the quantum of greenhouse emissions that CBA was responsible for financing, the risks to the company from un-burnable carbon and the current approach adopted to mitigate those risks (the First Resolution);
  2. That shareholders express their concerns as to the absence of a report identifying the level of greenhouse gas emissions CBA was responsible for financing and associated risks (the Second Resolution); and
  3. That each year at about the time of the release of CBA's annual report, the director's report to shareholders on their assessment of the quantum of greenhouse gas emissions CBA was responsible for financing (the Third Resolution).  This resolution required amendments to be made to CBA's constitution. 

The ACCR preferred option was that the First Resolution be voted on with the Second and Third Resolution suggested as alternatives, if the First Resolution was not found to be appropriate.

On 15 September 2014, CBA published its notice of meeting for the 2014 AGM which included only the third proposed resolution.  CBA's ASX notification of the Third Resolution stated that it did not consider the Third Resolution  to be in the best interest of shareholders. CBA's notice of meeting also indicated that it did not consider the Third Resolution was within the best interests of the company and recommended members to vote against it.

In correspondence with the ACCR, CBA also expressed the view that the First and Second Resolutions were management matters within the purview of the directors, therefore the resolutions were not capable of being legally effective.  

Subsequently, the ACCR:

  • Brought proceedings against CBA, seeking an injunction that CBA ensure the First and Second Resolutions were considered or moved at the next AGM and a declaration that the board of CBA had acted outside its powers in commenting and recommending shareholders vote against the Third Resolution.
  • Accepted that the directors of CBA were responsible under the constitution for the management of the company, and that shareholders could not direct the exercise of a power that was vested exclusively to the directors under the constitution. 
  • Contended that the First and Second Resolutions were nonbinding and were expressions of opinion and not an exercise of the company's power and did not purport to compel the CBA board in any particular way. This argument is however difficult to accept given the resolutions directly invoked the directors' fiduciary duty to act in the company's best interests.

The ACCR also criticised previous authority such as National Roads v Parker (Parker) which found that shareholders could not by resolution express an opinion of how powers vested by the company's constitution should be exercised. Alternatively the ACCR argued that the second proposed resolution was an exercise of power that was vested in the company's members at a general meeting by s 250R of the Corps Act.

Decision and analysis 

In summary, the court:

  • Did not accept the ACCR's criticism of Parker and instead upheld the view that it was no part of the function of members at a general meeting to express an opinion as to how a power vested in the directors should be applied. 
  • Found that the ACCR's submissions confused the situation where shareholders were requested to ratify directors' decisions.  The Court accepted in these cases, an opinion could be expressed however only after the board had sought the view of shareholders on management issues.
  • Stated that the only power which vested in shareholders was a power either provided to them under the constitution or one which the Corps Act required to be exercised at a general meeting.  No such power provided for shareholders to express opinions on the directors' functions as the First and Second Resolutions proposed.
  • Found that the provisions in s 250S which provided that members as a whole could ask questions at an AGM, did not support a wider power for shareholder to bring resolutions expressing opinions on management.
  • Rejected ACCR's allegations that the CBA board acted ultra vires, by recommending that members vote against the resolution.  The Court concluded the terms of the constitution empowered CBA to make these statements.

All in all, the decision is a win for directors, though it is important to remember that different results may arise particularly where shareholders seek to amend the constitution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Matthew Pokarier
Ben Di Marco
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.