Related Party Regimes and Other Specific Statutory Regimes

This chapter gives an overview of specific statutory regimes that require shareholder approval where directors are conflicted. These include related party provisions, as well as detailed regimes governing directors’ service contracts, substantial property transactions, loans and quasi-loans, credit transactions and related arrangements, and payments for loss of office. Each of these provisions is, in a sense, a more specific enunciation of the broader prohibition on conflicts. These regimes apply to situations in which corporate history has shown that a requirement of board approval was insufficient to combat inherent conflicts, undermining directors’ accountability. Shareholder approval is now therefore required. Securities regulators in each jurisdiction impose additional requirements (such as disclosure) to ensure transparency and fairness. Given that related party regimes deserve a book in their own right this chapter is necessarily an overview. It outlines the UK position and key features of the regimes in Australia and Hong Kong for comparison.