The Rise of Independent Directors In Australia: Adoption, Reform, and Uncertainty

LUKE NOTTAGE & FADY AOUN – Anglo-American corporate governance has long remained fixated on ensuring that the interests of dispersed shareholders in publicly listed corporations prevail over competing managerial interests.3 The main solution offered here has been to conceptualize directors as the stockholders’ agents for monitoring managers.4 But the rise of large institutional stockholders in global markets, especially in the United States,5 has cast doubt on this theory’s empirical premise. Influential commentators now urge measures encouraging stockholders to take more active roles in corporate governance,6 or press more broadly for enhancing their rights in light of expansive directorial discretion.7 Others insist, albeit through the lens of stockholder wealth maximization and while allowing for significant differences among countries, that the board should retain significant decision-making powers.8 Read More…

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