157A. Powers of directors Flashcards
157A. Powers of directors
General overview
[157A.01] This section sets out the basic constitutional arrangement or division of powers between the members and the board. Generally, the board is empowered to exercise all management powers except those powers that are reserved to the members at general meetings in accordance with the constitution. Section 157A was amended to make clear this division of power after the decision by Lim Teong Qwee JC that minority shareholders could requisition a general meeting to decide whether to appoint a special investigation into the company’s books, which indirectly usurped the board’s management power: Credit Development Pte Ltd v IMO Pte Ltd [1993] 2 SLR 370 ; cf Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame [1906] 2 Ch 34, CA where the articles reside management powers in the board and members have no power by ordinary resolution to overrule the board’s business decision. Where the articles limit the powers of the company at general meetings, they cannot be disregarded by the majority even if it is sufficiently large to alter the article: affirmed in Quin & Axtens Ltd v Salmon [1909] AC 442, HL . The article must first be altered and then acted upon: Imperial Hydropathic Hotel Co, Blackpool v Hampson (1882) 23 Ch D 1, CA . Until the amendment of s 157A, the old article 73 of Table A was ambiguous in that there was a power reserved to the company in general meeting to prescribe “regulations” that override the apparent autonomy of the board: Marshall Valve Gear Co Ltd v Manning, Wardle & Co Ltd [1909] 1 Ch 267 , per Neville J.
