Master the Art of dealing with Shareholder Disputes with these 7 Tips4-June-2019 Commercial Disputes By Jamal Bakalian
Shareholder disputes can be difficult to resolve. The key to dealing with these disputes is prevention. If that’s too late, here are some tips that will also empower you to deal with shareholder disputes so that they do not drain your time, money and energy.
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1. Prepare a Shareholders Agreement
Avoid uncertainty, by creating certainty for shareholders by preparing and executing a Shareholder Agreement that governs the relationship and powers of shareholders.
2. Avoid Decision Making Stalemates
Planning and discussing the imminent deadlocks in decision making with a Specialist may help you unblock or see other avenues for resolving deadlocks that will lead to
3. Communicate the company’s success to stakeholders
Avoid shareholder restlessness by communicating appropriately to shareholders.
It is important that shareholders are confident in the company and confident in the Board’s ability to manage the company. What better way for shareholders to (re)gain confidence in a company than to receive communication packs on their investment!
4. Communicate and Control- The Agenda
Agendas are a very powerful tool in a controlling the tone, topics and timing of a meeting. Prevent an unnecessarily long meeting by setting a strict agenda with speaking times allocated to each point and, most importantly, make sure that everyone receives a copy before the meeting.
Board packs should be distributed well in advance of meetings!
5. Kick Goals with KPIs to establish clear goals for company performance
Setting goals for company performance in a meeting is not only helpful the growth of the company, but it is also a tangible indicator to help shareholders appreciate the company’s vision and measure success.
Key Performance Indicators should be S.M.A.R.T. and realistic. Setting people up for failure with unattainable KPIs will demoralise and inhibit performance.
6. Demonstrate Your Awareness of Your Director’s Duties
Understanding and then demonstrating your awareness of your duties as a director will give you peace of mind, as well as set an example for those around you.
First things first, ensure the company books and records are up to date – this is the evidence of the company’s position and status.
7. Director Disclosures
Directors have a duty to “act honestly, in good faith and in the best interests of the company” (s 181(1) of the Corporations Act). Conflicts of Interest? If you are unsure, contact this office. If you have a concern regarding a concurrent venture or dealing there is probably a reason to disclose.
Contact our Expert Commercial Dispute Resolution Team to arrange a Shareholder Dispute Review with a Specialist.
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