Corporate Governance and Shareholder Rights

Flashcards covering key vocabulary and concepts related to corporate governance and shareholder rights.

Proxy

A proxy is an authorization allowing someone else to vote on behalf of a shareholder at a meeting.

Quorum

A quorum is the minimum number of shareholders required to be present at a meeting in order to conduct business.

Dividends

Dividends are payments made to shareholders from a corporation's profits, typically ordered by the board of directors.

Fiduciary Duty

A fiduciary duty is a legal obligation to act in the best interest of another party, such as a corporation's directors and officers to its shareholders.

Business Judgment Rule

The business judgment rule protects directors and officers from liability for decisions made in good faith, with care, and informed judgment.

Conflict of Interest

A conflict of interest occurs when a director's personal interests interfere with their duty to act in the best interest of the corporation.

Corporate Veil

The corporate veil is a legal concept that separates the entity of the corporation from its owners, protecting them from personal liability.

Cumulative Voting

Cumulative voting is a voting system that allows shareholders to allocate their votes among multiple candidates for the board of directors.

Annual Meeting

An annual meeting is a required yearly gathering of a corporation's shareholders to discuss the company's performance and make key decisions.

Majority Vote

A majority vote is a voting system where more than half of the votes cast must be in favor of a proposal to pass it.