Report of the Committee on Company Law Amendment
Encyclopedia
The Report of the Committee on Company Law Amendment (1945) Cm 6659, known best as the "Cohen Report" for short, was a company law reform committee appointed by the United Kingdom
Coalition Government, during the Second World War. It was chaired by Lord Cohen
.
, who later became Chancellor of the Exchequer
.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
Coalition Government, during the Second World War. It was chaired by Lord Cohen
Lionel Cohen, Baron Cohen
Lionel Leonard Cohen, Baron Cohen PC , was a British judge.Invested to the privy council in 1946, Cohen was Lord Justice of Appeal from 1946 to 1951. On 12 November 1951, he was appointed Lord of Appeal in Ordinary and made additionally a life peer with the title Baron Cohen, of Walmer in the...
.
Background
The Committee was appointed in June 1943 by Hugh DaltonHugh Dalton
Edward Hugh John Neale Dalton, Baron Dalton PC was a British Labour Party politician who served as Chancellor of the Exchequer from 1945 to 1947, when he was implicated in a political scandal involving budget leaks....
, who later became Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
.
Recommendations
- This report recommended that shareholders be given a greater degree of control over directors, and led to CA 1948 s 184, then CA 1985 s 303, now CA 2006 s 168
- This also recommended that payments to directors on retirement should be subject to company approval (para 92, then CA 1947, then s 192 CA 1948).
- p 47 said ‘the suggestion that managing directors are paid excessive sums is, as a rule, unfounded’ but recommended disclosure of aggregate compensation of directors as a group, including payment for outside services.
- p 50 expressed concern about directors buying and selling shares with inside knowledge of the company, but merely recommended publicity (cf s 16 Securities Exchange Act, s 17 Public Utility Holding Company Act)
- p 51 recommended loans to directors be prohibited, except where companies are in the loan making business
- p 50 rejects the suggestion that interested directors could vote on transactions in which they are interested, as being impracticable
- It recommended abolition of the ultra viresUltra viresUltra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...
rule, so every company has the capacity of a normal individual (this was done by the Companies Act 1989, now in CA 2006 s 40) - It proposed that the Board of Trade would be given power to litigate on behalf of shareholders across the country
- para 126, twenty one days for annual meetings and meetings with special resolutions pending, fourteen days for others.
External links
- Full text of the Cohen Report on takeovers.gov.au