What does the future hold for shareholder democracy, asks David Greene
The hot topic of the week is the control that shareholders have over executives’ remuneration and bonuses. Vince Cable has joined the throng with fresh proposals for change. The idea, however, that increasing shareholders’ control over this aspect of the relationship between their company and its senior employees will serve some wider social good is illusory, notwithstanding politicians’ declarations to the contrary. If they want to achieve control of executive conduct by shareholders, the way in which that relationship works would have to shift radically. In any event, are shareholders willing, able, or indeed the right people, to exert such control?
Primary responsibility
Directors’ primary responsibility is to the company with which they have contractual and other obligations. Their additional common law duties to the company are set out in the Companies Act 2006 (CA 2006) at ss 170–181. Much was made of these new provisions, but commentators recognise that they merely repeat what was previously enforceable at common law.
Some of the pre-publicity to CA 2006 suggested that the statutory duties
