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)negotiated settlement where each side is granted control over one of the open seats
B)protracted legal battle over control of the board of directors
C)arbitrated settlement where the arbitrator determines who will be elected to the board
D)control of the board decided without your influence
E)proxy fight for control of the board

Question

Quizplus · Accepted Answer

Since no single shareholder can personally control the outcome of the election, the most likely scenario is a proxy fight where shareholders who support a change in leadership will seek to persuade other shareholders to give them control over the two open seats. This can be done through direct mail campaigns, phone calls, meetings, and other means of communication. The outcome of the vote will depend on how successful each side is in securing the votes of other shareholders. A negotiated settlement or arbitration are less likely as both sides may be unwilling to compromise and protracted legal battles may be expensive and time-consuming.

Chemical Mines Has 5,000 Shareholders and Is Preparing to Elect