| Commentary

71 Limits on shareholders’ power

| Commentary

71 Limits on shareholders’ power

The supremacy of the general meeting is severely restricted in practice. A general meeting of shareholders can only be an ‘effective mechanism for quasi-democratic control of the directors’1 if most of the votes are held by members other than the directors or their nominees, and all or a sufficient number of the members are able and willing to participate in the meeting. In practice, these conditions are rarely met, not only in the case of small private, primarily family-owned, companies but also in relation to public companies.

The holding of a formal general meeting serves little

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