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Member decision-making Structural or constitutional matters (these include adoption of and amendment to the internal governance rules, changes of company name and type, variations of class rights, certain transaction affecting share capital)Director appointment and remuneration; appointment of auditors (appointment and remove of directors, certain parts of the directors' remuneration and benefits)some significant or related part transactions (related party transactions by public companies and their controlled entities, certain significant commercial transactions by listed companies, certain takeover and reconstructions)winding up (to initiate a members' voluntary winding up, under general law, to pass resolutions where the board is unable to act, or to ratify a breach of directors; duties)

Member voting Control and the exercise of voting rightsChanges to structureVariation of class rights In Greenhalgh v Aderne Cinemas Ltd, the company had issued 31,000 preference shares and 21,000 ordinary shares each carrying one vote. After dispute between Mr Greenhalgh and other members, other members voted by ordinary resolution to divide their shares, greatly increasing the number of votes they held. This was held not to vary the rights attaching to Mr Greenhalgh's shares because they retained the same voting rights (one vote for each share) as they had enjoyed before the resolution was passed even though his voting rights were affected in a business sense

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Transactions affecting capital e.g. share buy-backs, financial assistance and reductions of capital may require member approval

Composition of the board Appointment of a director may require member election or approval under the internal management rules. Also replaceable rules have provisions such as members elect the directors by ordinary resolution (RR s201G) and Members must approve appointments made under casual vacancy power (RRs201H)DVT Holdings v Bigshop.com.au the company's constitution provided for appointment of directors by ordinary resolution at an annual general meeting of the company however shareholders sought to requisition an extraordinary general meeting to appoint 3 new directors and remove 3 existing directors. The judge held that the shareholders' right to appoint new directors by ordinary resolution was limited to that set out in the constitution (only at annual general meeting) and that if the meeting wen ahead to remove the 3 directors without appointing new ones the number of directors would fall to 1-below the minimum. However, if that occurred the remaining director could appoint new directors to bring the number up to the statutory minimumListed companies always have director election. The members; righ tot remove a director for public company is set under s203D (ordinary resolution) for a proprietary company it is only if provided for in the internal management rules RRs203C

Directors' remuneration For example if replaceable rule in s202A of the Corporations Act applies to the company, the directors' remuneration must be approved by ordinary resolutions300A and 250R require a company to produce a remuneration report. Until the 2011 amendments, the shareholder vote on that report was advisory only. Those provisions have been strengthened by amendments in 2011 which provide a "2 strikes then spill" process. Process is triggered if more than 25% of votes at an AGM are cast against adopting the remuneration report. The first strike is a 'no' vote of 25% or more on the resolution that the remuneration report be adopted. In next remuneration repot after the first strike, Board must address any comments made at the AGM and explain its proposed actions. The second strike is a no vote of 25% or more on that next remuneration report then a spill resolution must be put to shareholders at the same AGM as the second strike vote. If more than 50% of eligible votes are cast in favour of the spill, then the company must hold another general meeting within 90 days at which all the directors (other than the managing director) who were directors when the board resolved to put the remuneration report to the AGM must stand for re-election

Vetoing certain transactions Members have the right to veto certain transactions (transaction cannot go ahead without their consent) such as related party transactions, listed company (significant transactions) and takeovers and reconstructions

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Related Part transactions s208 where public company gives a financial benefit to a related party member, approval is requiredThis also applies where the entity giving the benefit is controlled by public companyUnder s228 a related party may be one whichentity which controls the public company, directors of public company and their spouses, certain relatives of above, entities controlled by other related parties, entities who have been related parties in the last 6 months, entities who have reasonable grounds to believe that they will be related parties in the future, entities acting in concert with related parties

Types of meetings Mechanism for decision making, talking about members voting meetings. There's a requirement for public companies to hold an annual general meeting (s250N). Other meetings are called extraordinary general meetings and rules governing the meetings are set out in Pt2G.2 of the Corporations Act and the internal management rules

Members' meetings How does the meeting get called? It gets called by the board of directors but doesn't necessarily have to be the whole board because a single director has the power to call a meeting. If it's a listed company death with in s249 CA and unlisted in 249C (RR)This is the normal procedure particularly in relation to AGM. Members holding at least 5% of the vote or at least 100 members may request directors to call a meeting s249D. Then it's the directors obligation to comply with that request then members can conduct meeting. Recall NRMA case where memberes wanted to call meeting to direct returning officer about which method of voting to choose and Court said that is not a decision that members can make, it's a decision which constitution makes to returning officer (no point having a meeting if members are trying to do something they don't have power to do) If directors fail to convene meeting members can do the meeting themselves-> importance of convening.Meetings convened directly by members if members holding at least 5% of the votes. The downside with this option is that the members pay for it.There is a stop gap last option and that is that the court has power to convene meeting-usually when it is impractical to call meeting in any other way. This may occur when directors haven't been re-appointed and there's no directors or some people have died (in a small company) and you just don't have the practicable ability to call a meeting using methods usually usedThere are provisions about how the meeting gets called and how votes are exercised. So the minimum notice period is 21 days for unlisted s249 and 28 days for listed companies. You need to give notice of special resolution.And contents of the notice is when, where, nature of what is on agenda, text of proposed special resolution and procedure for appointment of proxies.Notice needs to give full and fair disclosure of business and not be misleading so they can decide whether they want to attend meeting and whether they want to send a proxy-> may instruct proxy to vote on a particular matter. The courts take a fairly pragmatic approach, Young J said don't trick or mislead people into thinking it's something other than what it really is- court says that you need to take into account that people will have a quick look and decide whether they will attend or send someone

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Fraser v NRMA (1995) Need to make full and fair disclosure must be balanced against the need to avoid confusing typical members. There was a lot of lobbying on both sides (for and against) and you need to keep things in plain english and understandableConduct of members' meetings It's usual for them to be a 'quorum' requirement- a minimum number of people who must attend in order for the meeting to be valid- the quorum is 2 s249T(RR). But in internal rules there may be another provision. Most of the requirement for annual general meetings arose when we didn't have as much technology. Most of provisions haven't changed and there has been discussion about the usefulness of the AGM and in particular, in it's current format. Proxies- a person appointed to attend and vote at the meeting for the members249X gives members the right to appoint a proxys250A makes requirements that appointment has to be signed and the persons name and address needs to be included It's quite common for people to appoint the chair of the meeting as the person's proxy and in that case you can nominate that person by the office they hold without specifying their name. 

Obligation of proxy You may not give your proxy any instruction but you're less likely to do that if you're appointing the chair of the meeting. s250A says that appointment may specify the way in which a person is to vote on a particular resolution. The proxy is not obliged to vote in a show of hands but if they are to they must do so in accordance with the way they've been instructed. If the proxy has 2 or more appointments that specify different ways to vote, the proxy must not vote on a show of hands (for something non controversial) However, if something more controversial such as a resolution was put to the members someone will say 'i demand a poll' where they fill in a written ballot paper instead of one vote per person you will get one vote per share. If proxy isn't chair they don't have obligation to vote on a poll but if they do they have to follow instructions

Whitlam v ASIC My Whitlam was a director of NRMA and its President and chaired the AGM held in 1998. This case arose as potential breach of director duties. He was appointed as chair of meeting as proxy for a few thousand members who had instructed him to vote against a resolution which was to be put at the meeting. He personally supported the resolutions. He file din the ballot paper for that resolution and for those proxy votes, the problem was that he didn't sign the ballot papers and the returning officer for NRMA formed the view that if they weren't signed they were invalid and so those votes didn't count. Then after the meeting the returning officer got legal advice and said he made a mistake and that those votes should have been counted. The case involved an issue of whether Mr Whitlam had failed director's duties and whether omission was accidental or intentional. The Court said he had voted in accordance with instructions and so there wasn't any breach of provisions in relation to appointment to proxies and proxies voting in accordance with instructions

Corporate representatives s250D If shareholder is a company and wants to attend an AGM they can't do it as artificial entity so it can use proxy procedure but they can also appoint a corporate representative which is a continuing appointment until it's revoked. The latter seems easier than always going through the proxy procedure

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Chairperson s249U elected by directors but if it hasn't occurred the members must elect chair of the meeting, their role is to ensure smooth running of meeting- to stick to agenda and make sure things run in ordinary fashion. The only real obligation from chair is to give members as a whole a reasonable opportunity to ask questions and make comments s250T.Voting initially show of hands but poll can be demanded if at least 5 members or members with 5% of the votes want one, proxy votes, resolutions ordinary resolutions need to be passed by 50% and special ones need to be passed by >75%Keep in mind that in relation to particular resolutions it may be that some people may be prevented from voting- we talked about related party transactions so if entity controlled by private company is involved in related party transactions, then unless it's in one of the exceptions, shareholder approval will be required for that transaction-> directors who are going to get the benefit are obviously not allowed to vote. There are a number of situations where people getting benefits of transactions are not allowed to vote. The ASX Listing rules requires certain transactions to go to members like sale of company's main undertaking and if there are interest parties there, they would be prevented from voting 

Decision making without a meeting singly member company won't give notice of a meeting. Resolution is passed by the member recording and signing it s249B. If all members are entitled to vote, sign a document agreeing to the resolution in proprietary companies

Irregularities you may have a few thousand shareholders and you have to mail out notices of meeting to all of them and your photocopier breaks down and some miss out on receiving their mail so it's possible that with all the requirements something has been overlooked and there has been some irregularly. Does this mean that anything passed at the passed meeting is no effect? What does this mean? If we look at s1322(2) procedural irregularities will not cause invalidity unless court believes there is substantial injustice i.e. automatic validation Bell Resources v Turnbridge Pty Ltd where substantial injustice was caused because members had not been given notice of important and fundamental resolutions. But this requires someone to do something and take action. S1322(3) deals with accidental omission to give notice of meeting (e.g. label scrunched up in photocopier) (3A) deals with not having opportunity to participate in dealing with failure of opportunity. Courts have said injustice needs to flow from irregularity itself and not just the irregularity. Poliwka v Heven Holdings Pty Ltd shareholder was not give notice of meeting but evidence was that he wouldn't have attended anyway, therefore no substantial injusticeMTQ Holdings Pty Ltd v RCR Tomlinson Ltd Shareholder denied opportunity to challenge the validity of the proxy votes case in favour of the resolution but the outcome would have been the same even if those votes had been successfully challenged, therefore no substantial injustice

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