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A recent Privy Council decision examines the extent to which formal shareholder resolutions may be bypassed by relying on the Duomatic principle.

By Daniel Smith and Alanna Andrew

The ability for shareholders to pass resolutions — or assent to a course of action — quickly and informally is a potentially useful tool at any time, and even more so in times of financial and business uncertainty. Shareholders may wish to ensure time-pressured deals or restructurings are completed at speed. Companies may face liquidity challenges or expiring business opportunities, which require shareholder resolution. For creditors or bondholders, there may be an incentive to move swiftly, for example, if a receiver (who is appointed pursuant to the terms of a debenture and empowered to exercise the company’s voting rights) wishes to amend Articles of Association in order to effect a contentious restructuring.

Companies and investors must consider the impact that poor corporate culture may have on their potential to achieve an exit, in particular an IPO.

By David Berman, Richard Butterwick, Chris Horton, Robbie McLaren, Anna Ngo, Nell Perks, Catherine Campbell, and Charlotte Collins

It is now apparent that no institution or business unit, whatever its geography, industry, sector, or size, is above the negative impact of a poor culture. Culture- related issues at Uber, Sports Direct, Boeing, and others highlight the implications of getting things wrong, including financial loss, reputational issues, and damage to investor confidence.

Often defined as “the way that people within an organisation behave when no one is looking”, culture is a growing area of focus for regulators and policymakers around the world. The focus on culture has become more acute during the COVID-19 pandemic, as investors and consumers observe and judge companies based on their navigation of the crisis, particularly treatment of employees and wider societal stakeholders.