Question

Chemical Mines has 5,000 shareholders and is preparing to elect two new board members. You do not own enough shares to personally control the elections but are determined to oust the current leadership. Likewise, no other single shareholder owns sufficient shares to personally control the outcome of the election. Which one of the following is the most likely outcome of this situation given that some shareholders are happy with the existing management?
A) proxy fight for control of the board
B) arbitrated settlement where the arbitrator determines who will be elected to the board
C) protracted legal battle over control of the board of directors
D) control of the board decided without your influence
E) negotiated settlement where each side is granted control over one of the open seats

Answer 1

Answer:

Chemical Mines

The most likely outcome of this situation given that some shareholders are happy with the existing management is:

A) proxy fight for control of the board.

Explanation:

Proxy fight is a competitive struggle that shareholders of Chemical Mines can engage in to support their factional sides by using proxy votes to gain control of the board of directors, thereby stirring decisions to their sides.  Proxy votes are the votes of shareholders elected to represent the absentee shareholders by those present at the annual general meeting, where directors can be appointed.