Shareholder rights and elections can impact how a business runs and ultimately its success. Shareholders are often associated with big companies, but shareholders can exist in almost any business formation. When shareholders are present, shareholder rights are also present.
Shareholder Rights and the Success of the Business
Shareholder rights can include many aspects that affect your company and a recent and interesting experiment with the Illinois Board of Investment and several other companies illustrated shareholder activism. Although the shareholder rights illustration occurred outside of California, similar situations could occur in a California business.
The shareholder rights experiment was completed with the intention to illustrate the activism of a business’s shareholders. One of the experiment’s implementations addressed the concept of a staggered corporate board. On a staggered corporate board, only a couple of directors are exposed to the shareholder’s voting decisions each year. The experiment suggested the repeal of a staggered board and the implementation of a business’s re-election of its directors on an annual basis to increase business valuation. The experiment indicated this change had a positive effect on the overall business and the results could impact California businesses.
It was argued that staggered corporate boards may not be in a shareholder’s best interest. The idea of increasing shareholder rights by having annual elections may provide shareholders with more attachment and value in connection to the company. Shareholders play a vital role in the success and longevity of a company. An increased relationship that promotes inclusion between a business’s management and its shareholders may benefit everyone, including the overall success of the business.
Shareholder Rights and Elections in San Diego and Southern California
Here in San Diego and Southern California, shareholder rights and elections include the right to inspect the company’s articles of incorporation and bylaws. Shareholders with at least 5% of outstanding corporate shares have the right to access shareholder lists and corporate financial information. Shareholders must be provided with the results of any vote at the meetings of a corporation (whether they be annual, special or regular).
California law provides specific protections and complex rights and responsibilities regarding shareholder rights and elections in our state. Shareholder and investor disputes are unfortunately quite common. This is why it is important to work with the experienced and proven business attorneys for shareholders and investors at the Watkins Firm. We protect our client’s investments and interests while working to resolve shareholder disputes in a timely and cost-effective manner.
If you would like to learn more about how shareholders rights and elections can impact how a business runs we invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
