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SS Lecture 5 - SS Lecture 5 Overview Corporate...

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1 SS Lecture 5 Overview Corporate decision-making HRS ¶5-001- ¶5-580 2 dcsn-mkg organs d k b f th di t 1 dcsn-mkg by one of those organs:directors The concept of corporate governance ¶5- 600-¶5-660 Co Decision-making How do companies make decisions? Does a co have a mind and will of its own? 2 2 decision-making organs Power to make decisions is divided between: – the members in general meeting the board of directors 3 – the board of directors That power is a power to act as the co (and thus bind the co) or to delegate the power. Co dcsn-mkg by an outsider The dcsn-mkg powers of both organs sometimes pass to an outsider • When? T h t t id ? To what outsiders? 4 Division between organs Each organ has power to make particular decisions Powers of ea depends on the internal govnce rules CA 2001 and general pples govnce rules, CA 2001 and general pples of co law 5 Division a balancing exercise Let directors manage; but Who has provided capital? Should they be allowed to make some d i i ? 6 decisions? Usually: dirs have power to manage and members entitled to decide only a ltd no. of matters
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2 Each organ sovereign One cannot interfere with powers of other - Automatic Self-Cleansing Filter Syndicate v Cunninghame HRS 103: intnl govnce rules gave dirs general mgmt powers – members could qualify by sp resoln
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