ABSTRACT
Directors of a company, even when acting within the powers conferred upon them, are required to comply with fiduciary, common law and statutory obligations in exercising those powers. A shareholder may encounter difficulties in enforcing his rights (due to Foss v Harbottle (1843)) but the existence of the obligations is certain. However, a minority shareholder may not be unhappy with the conduct of the directors but feel that the conduct of other shareholders in the company (generally a majority or another class) is prejudicial to his interests. For example, the majority shareholder may vote to change the articles, or block a decision to sue an errant director, or ratify the actions of that director; or voting shareholders may change the rights attaching to non-voting shares, contrary to the wishes of the minority or the non-voting shareholders. What, if anything, can the disgruntled shareholders do? Of course, the majority shareholder must comply with the provisions of the Companies Acts, the provisions of which may set out particular majorities which are required for certain ends to be approved. For example, s 9 (changing the articles) requires a special resolution, a vote to relieve a director from the consequences of entering an ultra vires contract requires a special resolution (s 35) and some variations of class rights require the class to be varied to approve the variation (s 125(3)). But is there a general fiduciary duty imposed on shareholders which is akin to that imposed on directors?
