Director motions at a shareholder meeting

[Guest Ray]

I attended a stakeholder meeting where the other two shareholders are also the directors. After the review of the financial statements, the Chair asked for a motion to approve the statements, the other shareholder seconded, and they moved on.

I indicated that there was no vote, to which they replied that it was a motion for the directors, and not the shareholders.

Is it proper to have a motion in front of an assembly that is not for that assembly?

[Guest Ray]

Should read "I attended a shareholder annual meeting..."

[Timothy]

It sounds like the directors are holding a directors meeting at the same time as and in the same room as the shareholder meeting. No, there is nothing about that that is proper.

[Gary Novosielski]

There is also nothing proper about approving a motion with no semblance of a vote (or unanimous consent request), even if the "meeting" were proper, which it wasn't.

[Richard Brown]

There is also nothing proper about approving a motion with no semblance of a vote (or unanimous consent request), even if the "meeting" were proper, which it wasn't.

I agree, but it seems to me like what was done amounted to unanimous consent, especially if nobody objected or said, "Wait a minute, Mr. Chairman, we never actually voted on whether to approve the financial statements".  I get the impression that this was a very small  group of only about three people. It was sloppy, but not that unusual for such a small group.

 

Also, even though a second doesn't necessarily indicate support for the motion, as a practical matter it usually does indicate agreement.  If there were only three members present and voting, and one member made the motion and another member seconded it (which wasn't even necessary in a small  board), it seems probably probable that two out of the three members were in support.  If the third one was opposed, he should have spoken up.

 

Note:  My answer is assuming this was a legitimate meeting, of which there seems to be some doubt.  I am not opining on that issue.

[Gary Novosielski]

I don't disagree with any of that.  But I would certainly disagree with a description of such a procedure as "proper".