This paper examines the mechanisms for block shear failures of bolted connections in steel plates postulated in the design equations specified in the North American, European and Australian steel structures codes. It explains that there is only one feasible mechanism for the limit state of conventional block shear failure, that which involves tensile rupture and shear yielding, irrespective of the steel material ductility. It describes the fundamental shortcomings of various code equations for determining the block shear capacity of a bolted connection. Based on the tensile rupture and shear yielding mechanism, an in-plane shear lag factor, and the active shear resistance planes identified in the present work, this paper proposes a rational equation that is demonstrated to provide more accurate results compared to all the code equations in predicting the block shear capacities of bolted connections in G450 steel sheets subjected to concentric loading. The resistance factor of 0.8 for the proposed equation is computed with respect to the LRFD approach given in the North American specification for the design of cold-formed steel structures.