Aiman Nariman Mohd-Sulaiman

Shareholder primacy, controlling shareholders and Malaysia’s Companies Act 2016

ABSTRACT The predominant corporate governance model within the Commonwealth mimics that of the UK where powers of management are reserved for the board. This director primacy model, however, is being challenged by proposals to expand shareholders’ decision-making rights including giving shareholders the power to initiate their own proposals and to instruct the board. Amidst this debate, Malaysia has passed its new Companies Act 2016 which contains, amongst others, s 195 which empowers shareholders to make binding recommendations to the board relating to the management of the company. Empowering shareholders by giving them such powers have been the subject of intense criticisms. This article examines s 195 and the shareholders participation eco-system to provide an idea of the law in practice as well as to address the concerns relating to giving shareholders such expansive power. This article advances the view that the decision-making framework under the Companies Act 2016 and the actual functioning of the power to instruct show that these criticisms may be unfounded and the potential setbacks of shareholder empowerment can be minimised through judicious use of legal rules.

When arbitration clause and oppression claim collide

The question regarding the position of arbitration clauses within the context of shareholders’ protection under company law rules has been dealt with in a decision from the United Kingdom, Exeter, which upheld the inalienable right of the members to bring an oppression claim despite the presence of an arbitration agreement. The issue was recently revisited in several common law jurisdictions – United Kingdom, Malaysia, Singapore and Hong Kong with mixed results. The article discusses this development to clarify the scope, breadth and limits of the arbitration clause within company law.