One of the classic debates in corporate law relates to whether the
rules of corporate law are or should be 'mandatory', in that companies
must comply, or 'enabling'- meaning a set of default rules
which companies have the choice of adopting or 'opting out' of
through alternative contractual arrangements. The so-called
'mandatory/enabling' debate has been especially prominent in the
United States for numerous reasons, yet has also received some attention
in Australia. That said, the extent to which companies can
'opt out' of corporate law has rarely been considered as a practical
issue in Australia - particularly whether Australian companies can
'opt out' of provisions under the Corporations Act ("the Act").
However, just recently, two high-profile events in Australia have made 'opting out' of corporate law a relevant issue, especially the
question of whether companies are free to 'opt out' of provisions of
the Corporations Act which provide express governance rights to
shareholders. These events were Boral's constitutional amendment
in 2003 to restrict the ability of shareholders to propose amendments
to the company's constitution, and the contemplation and
introduction of so-called 'pre-nuptiaV agreements- designed to bypass
the right of shareholders to vote on removing directors in public
companies. In light of these two recent events, in this article the
authors revisit the mandatory/enabling debate. However, rather
than going over old ground as to whether a mandatory or enabling
approach to corporate regulation is desirable, the authors approach
the issue from a fresh perspective: that Australian Securites
and Investments Commission's ("ASIC") existing relief powers
under the Act should be extended to provide a means for companies
to opt out of provisions containing shareholder governance rights.