Question

Corporate shareholders are best protected from incompetent _______.

(A) management decisions by the ability to engage in proxy fights.

(B) management's control of pecuniary rewards.

(C) the ability to call shareholder meetings.

(D) the threat of takeover by other firms.

(E) one-share/one-vote election rules.

Answer 1

B

Step-by-step explanation:

Shareholders may protect their rights indirectly, by bringing lawsuit against management or controlling shareholders on behalf of the company itself. These rights are crucial for the protection of share holders from poor management. It is pertinent and paramount to note that regulations protecting the shareholder rights secure the equality of the shares and to protect the company's minority shareholders.

Answer 2

Answer: A

Step-by-step explanation:

Management decisions by the ability to engage in proxy fights. A proxy fight, also known as a proxy contest or proxy battle, refers to a situation in which a group of shareholders in a company joins forces in an attempt to oppose and vote out the current management or board of directors. In other words, a proxy fight is a battle between shareholders and senior management for control of the company.

Corporate shareholders are best protected from incompetent management decisions by the ability to engage in proxy fights.