Question

How can a proxy contest be used to overcome a captured? board??

?Select all that apply:

A) Proxy contests are simply contested elections for directors. In a proxy? contest, there are two competing slates of directors rather than just one slate proposed by the company.

B) If a board has become captured or unresponsive to shareholder? demands, shareholders can put their own slate of new directors up for election.

C) If a board has become captured or unresponsive to shareholder? demands, the CEO can put a slate of new directors up for election.

D) If the dissident slate? wins, then shareholders will have succeeded in placing new? directors, presumably not beholden to the? CEO, on the board.

E) If the dissident slate? wins, then the CEO will have succeeded in placing new? directors, presumably not beholden to the? CEO, on the board.

Answer 1

A,B, and D are the options

A proxy contest occurs when the shareholders come together to make a change in the governance. They are opposed by the current directors hence they persuade other shareholders to cast their proxy vote for change in the directors. There would be at 2 slates of directors. If the Board is captured, the shareholders can put up their own slate of directors for contesting. If the dissendent slate wins, the sharehodler will succeed in replacing the directors.