Australia is a nation with strong legal system with a higher level of legal protection for shareholders and creditors2 compared to other nations (La Porta et al, 1998, 1999).In this essay, the various issues concerning the minority shareholder rights in Australia and the different ways by which the shareholder rights may be protected are discussed in detail. This is organized as follows. In the second section, the theoretical perspectives of corporate governance and the problems between directors and shareholders are discussed. In the third section, the directors and shareholders; rights and obligations are discussed. In the fourth section, various issues regarding the minority shareholder rights are discussed. In the fifth section, various remedies for protecting minority shareholder rights are discussed in detail. The fifth section concludes the essay.
Starting from classical economists like Smith (1776), Berle, and Means (1932), many studies have been done on the conflicts of interests between the principal or investors and the agent or managers. The idea of separating the concepts of ownership and control has been developed based on these studies. The role of corporate governance comes in this context.
According to Shleifer and Vishny (1997), corporate governance is given a broad definition.Corporate governance “ deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment”. OECD(1999) defines corporate governance as “the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are