In Australia, if 25% of the shareholders of a listed company (excluding directors and key executives) who vote on the company's remuneration report object to the report for two years running, the entire board may face re-election. This "two strikes rule" shifts the traditional division of responsibility for management between directors and shareholders and has stirred up heated debate among relevant stakeholders. This article looks at the history and effects of the rule.

This article is part of the PLC multi-jurisdictional guide to corporate governance law. For a full list of contents visit www.practicallaw.com/corpgov-mjg.