Shareholders in public companies have a right to remove directors by an ordinary resolution requiring 50 per cent of the shareholders (in attendance and voting at the relevant meeting) to approve any resolution to remove a director.

This right to remove directors is often used along with the right of members who control 5 per cent of the voting shares to call for a general meeting.

The Corporations Act contains a rule that allows companies, by ordinary resolution, to remove a director from office. However, a private company’s constitution can override this rule. Private companies can create alternative methods or restrictions on director removal in the company constitution.

The power to manage the affairs of Australian companies rests with the board. Shareholders do not have a general right to require a board to take a particular course of action.