Board Of Directors Voting Agreement

You have to ask yourself if you are the shareholder, the manager and the staff, because you can have rights in any function. To understand your negotiating position, you need to consult the company`s articles, your employment contract and the shareholders` agreement. These can be linked. As a director, you may have no choice but to resign. If you don`t agree with the map`s strategy, this offers a simple solution. However, if your resignation is based on concerns about the legality of the board`s activity, you should seek legal advice; A resignation may not protect you from future liability for decisions made while you were a director. Rules on how decisions are made should be included in the company`s shareholders` covenants and/or pacts. The president should report it in conflict situations. By changing the choice of directors, a shareholders` pact can allow shareholders to agree among themselves on how directors are elected rather than leaving them to a simple majority decision. Although you are generally not responsible for the actions of other directors if you were not aware of and participated in them, it is not enough to close your eyes to protect yourself. A court case in 2009 confirmed that when a director of a company was able to commit fraud because of the inaction of other directors, these directors also breached their obligations to their company.

In this case, a dominant officer had taken nearly $60 million from his company, falsely used three of the company`s bank accounts and created fictitious bank loans and fake letters from bank facilities. The court explained that the other two directors themselves breached their obligations to their company by not questioning the manager about his actions. The company`s statutes should specify who holds the voting rights for the common shares. Normally, the shareholder whose name appears first in the shareholder register has the voting rights to that share. If, according to the company`s statutes, the directors have the power to make the decision and (as usual) there is nothing in the company`s articles that gives shareholders the power to overstep the directors, the answer is “not directly.” However, shareholders have different options: in practice, healthy boards of directors rely more on negotiation and discussion than on legal constraint. There`s no reason for you to agree with any decision made – but if a decision is made intentionally behind your back, you might feel like you can no longer be a director. If you feel that the board or one of the directors acted inappropriately, see 9. Managers must keep ad terms of what is happening in the company and participate in their management. They should not stand idly by and let other directors act without being ready to challenge them, no matter how dominant they are. However, it is possible that the company`s statutes or a shareholders` pact will set up another system.

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