The 'two strikes' rule on the remuneration report : threats and opportunities for boards

Chapple, Larelle June & Hubner, Tereaze (2013) The 'two strikes' rule on the remuneration report : threats and opportunities for boards. Australian Journal of Corporate Law, 28(2), pp. 166-180.

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Abstract

This article examines the fast moving debate on the law and policy surrounding shareholder voting on their companies’ remuneration report, at the AGM. Recently, Australia has moved from the ‘non-binding’ vote provided to shareholders, to the more prescriptive ‘two strikes rule’; that is, two negative shareholder resolutions after 1 July 2011 may result in a board re-election. While much commentary has focused on the potential threats— impacts on remuneration reports and the potential costs to the company — we discuss another potential consequence: an opportunity for board recruitment. At a time when companies are also expected to comment on their diversity policies, planning for a threatened ‘spill’ creates an opportunity for board composition planning and succession. The arguments presented are also placed in the context of the UK debate, where recent proposals advocate for wider stakeholder engagement and diversity in remuneration planning.

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ID Code: 64416
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: two strikes rule, remuneration report, shareholder voting
ISSN: 1037-4124
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000)
Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Deposited On: 13 Nov 2013 22:33
Last Modified: 14 Nov 2013 23:18

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