Remove directors from the board. The shareholders can vote to remove directors from the board before their terms expire, with or without cause, unless the corporation has a staggered board. The shareholders can then vote to replace the directors they removed.
A shareholder or group of shareholders representing at least 5% of voting rights can request the directors of the company to call a general meeting (section 303, Companies Act 2006).
As a general rule, shareholders who are entitled to vote at a meeting are entitled to attend the meeting.
Annual meeting agenda
- consideration of the financial statements.
- appointment of an auditor (or a resolution of all shareholders not to appoint an auditor)
- election of directors.
Elect Board of Directors
The most important vote that shareholders of a corporation make is to elect the company’s board of directors. A corporation must have a board and the members of the board of directors set the goals and provide guidance on how the company will be managed and run.
While the rules of Cumulative Voting can be quite complex, the simple rule is that the shareholder or shareholders who control 51% of the vote can elect a majority of the Board and a majority of the Board may terminate an officer. Quite often the CEO is also a shareholder and director of the company.
A shareholder can sell or give away shares to anyone unless the company’s articles impose an effective restriction, or the shareholder has agreed not to transfer them or to deal with them in some other way in a binding contract.
A board of directors is elected by shareholders but nominated by a nominations committee.
Stockholders generally do not control day-to-day business decisions or management decisions, but they can influence business management indirectly through an executive board.
Shareholder voting typically takes place at the annual shareholder meeting, which most U.S. public companies hold each year between March and June. There are three new or continuing developments this year: Shareholder Proposals on Proxy Access.
A common misconception is that the shareholders vote to approve dividend payments at the annual meeting of the corporation. Absent extraordinary circumstances where the board of directors is deemed to not be functioning appropriately, dividend payments are not approved by shareholders.