Report of the Committee on Company Law Amendment

Background

Recommendations

• This report recommended that shareholders be given a greater degree of control over directors, and led to CA 1948 s 184, then CA 1985 s 303, now CA 2006 s 168
• This also recommended that payments to directors on retirement should be subject to company approval.
• p 47 said ‘the suggestion that managing directors are paid excessive sums is, as a rule, unfounded’ but recommended disclosure of aggregate compensation of directors as a group, including payment for outside services.
• p 50 expressed concern about directors buying and selling shares with inside knowledge of the company, but merely recommended publicity
• p 51 recommended loans to directors be prohibited, except where companies are in the loan making business
• p 50 rejects the suggestion that interested directors could vote on transactions in which they are interested, as being impracticable
• It recommended abolition of the ultra vires rule, so every company has the capacity of a normal individual
• It proposed that the Board of Trade would be given power to litigate on behalf of shareholders across the country
• para 126, twenty one days for annual meetings and meetings with special resolutions pending, fourteen days for others.