Question

A large and growing manufacturing company, SAS has 652 shareholders. The largest shareholder is the company founder, president, and head of the board of directors. He holds 30% of the company stock. Next is the company CEO, and co-founder. He holds 15% of the company stock. Finally there is the president’s son, the COO of the company who holds 10% of the company stock. There are twelve other board members of the company, but none holds more that 2% of the company’s stock. This gives SAS a total of 15 board members. At a meeting of the board of directors the President, CEO, and COO all vote to expand operation to Canada. The remaining 12 board members vote no. Which side will win the vote. Will the losing side be able to have their dissenting votes recorded in the meeting minutes

Answer 1

The side with 12 boards member will win because it does not matter what percentage of shares are held by the share holders but what percentage of boards members approve or dissaprove a decision. In this case, out 15 boards members, 80% of the members (12 members) disapprove the decision. So, they will win.

Yes, the losing side will be able to have their dissenting votes recorded in the meeting minutes because approvals & disapprovals of the minority percentage is also taken into account when making a decision.