LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017. 108 (d) Limited role that shareholders have in management A company often has a separation of powers between management and shareholders. According to Samuels JA., in Winthrop Investments Ltd v Winns Ltd) 2 NSWLR 666 at 683 “... The shareholders may have, ultimate control, because they can alter the articles or remove the directors but they cannot interfere in the conduct of the company business where management, as here, is vested in the board ... they have no general power to transact the company's business, or to give effective directions about its management." This injustice is further illustrated in the case of Automatic Self-Cleansing Filter Syndicate Co. Ltd v Cunninghame(1906) 2 Ch 34where an article gave power of management to directors "...subject to such regulations as may from time to time be made by extraordinary resolutions." A further article gave the board power to sell property owned by the company on terms it thought fit. Shareholders at a meeting purported by ordinary resolution to direct the board to sell property and the board refused and relied on the articles. The Court held that unless an extraordinary resolution was passed, as provided for in the articles, the shareholders could not ignore the articles and give directions 455 THE TREND IN ITS APPLICATION The principle of corporate personality which is said to cast upon the company, “a veil of incorporation” as was espoused in the case of Salomon V Salomon has been applied in the following cases- Lee v Lee's Air Farming (Supra where Lee formed a company Lee's Air Farming Ltd to carry on the business of aerial topdressing. Lee held all the shares except for one which was held by his solicitor. Lee was governing director of the company and employed as its chief pilot. Lee was killed while working for the company when an aeroplane crashed. His widow sued under the company's workers' compensation insurance. The New Zealand Court of Appeal rejected the claim on the basis that since Lee was the governing director of the company, he could not also be its employee. His widow appealed to the Privy Council. The Court held that the company was a separate legal entity.
