Each year, your investors attend an annual shareholder meeting where they exercise their voting rights and shape the next year of business. But what happens if someone can’t attend the meeting? In this situation, a proxy comes into play. By using a proxy, shareholders can have a say during the annual company meeting without actually showing up.
Depending on your business’s rules, shareholders may use different methods for voting by proxy.
Of course, each shareholder has the option of showing up at the meeting to vote on the issues in person, but it’s not always possible for every investor to attend. For example, people who only own a small stake in the business may not want to bother attending. What the proxy option does is allow each shareholder to place the qualifying number of votes without going to the meeting.
Before the meeting, mail each of your shareholders a detailed proxy statement that covers all the points of the meeting. Include information about any specific issues and provide insight on those issues, so they can learn about the meeting agenda and make educated votes either in-person or by proxy.
Be sure to give shareholders the option to vote by proxy remotely. The methods for voting remotely typically include mail, phone, and online options. Voting methods may vary based on how your company manages proxies. By offering multiple proxy options, you make it possible for all investors to have a say and represent their interests.
Besides voting remotely, a proxy can also be an authorized person who acts on behalf of the shareholder. This person attends the meeting and places the vote in place of the shareholder. Keep in mind that the person serving as proxy needs documentation or power of attorney to exercise some actions at the meeting.
Proxies take on different forms, but the concept puts investors on equal footing. The proxy option means all shareholders have a say in how the company moves forward, whether an authorized representative places the vote or the shareholder votes remotely.