Reconsidering the Rule on Shareholders’ Exercise of Voting Powers

We challenge the common law rule that shareholders can generally vote as they please, even if their intent or the effect of which is opposed to the company’s interests by demonstrating that its key underlying rationales – votes are property rights and shareholders can bind themselves to vote as they please – are unpersuasive. We then argue that (1) the general meeting is the company’s agent; (2) shareholders are generally not personally liable for the consequences of the exercise of their voting powers; and (3) the general meeting’s decisions should be subject to the requirement of Wednesbury unreasonableness