Can shareholders overrule directors?
Under company law, there are only a limited number of decisions which require shareholder approval. The company’s articles of association may give the shareholders further rights to take decisions. Otherwise, day to day decisions are made by the directors and cannot easily be overruled. Shareholders with at least 5 per cent of the voting rights can require the company to call a shareholders’ general meeting, and to consider a resolution. This resolution could address a specific decision which the shareholders wish to overturn. Alternatively, the resolution could be aimed at replacing the existing board with new directors who are expected to take decisions with which the shareholders agree .
