Allowing a Director to Vote where there is a Conflict

The standard 2006 Model Articles provide that if a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes.

To counter this the company may by ordinary resolution dis-apply the provision of the articles which would otherwise prevent a director from being counted as participating in the decision-making process.

Notwithstanding, in the event of a potential conflict of interest the relevant director may be counted in the quorum and/or voting process if:

  1. The director's interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or
  2. The director's conflict of interest arises from a permitted cause.
Permitted Causes include
  1. A guarantee given, or to be given, by or to a director in respect of an obligation incurred by or on behalf of the company or any of its subsidiaries;
  2. Subscription, or an agreement to subscribe, for shares or other securities of the company or any of its subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for any such shares or securities; and
  3. Arrangements pursuant to which benefits are made available to employees and directors or former employees and directors of the company or any of its subsidiaries which do not provide special benefits for directors or former directors.

An alternative would be simply to alter the articles of association to remove all reference to a potential conflict of interest which is the purpose of this transaction.