Shareholder Proposals

2/21/2024 pdw

Shareholders have the highest approval authority in a corporation, but they are limited in the actions they can initiate. Most things that shareholders vote on must first be approved by the board. This includes merger proposals, amendments to the charter or ratification of various items.

Some items reach the shareholders by statute. For example, under the default rules, shareholders elect the directors annually. DGCL § 216; MBCA § 7.28. We'll discuss how this process works.

Some items are raised by shareholders directly. Shareholders are able to submit proposals for a shareholder vote, but the topics they can address are rather limited. We'll discuss shareholder proposals and their limits more in this section.

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