Shareholder Primacy

Majority vote standards, bylaw amendments

9 snips
Oct 15, 2025
In this discussion, hosts delve into the complexities of majority vote standard proposals and bylaw amendments. They explore Duke Energy's struggle with high charter amendment thresholds, highlighting the history of repeated shareholder initiatives. The hosts clarify the difference between precatory and binding proposals and analyze the motivations behind boards stalling shareholder-driven changes. They offer insights into the legal landscape surrounding bylaw amendments and suggest strategies for strengthening shareholder influence. A captivating exploration of corporate governance dynamics!
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ANECDOTE

Duke's Longrunning Majority-Vote Saga

  • Duke repeatedly faced majority-vote proposals from John Chivadin dating back to 2016 and often got strong shareholder support.
  • The company recommended a precatory majority-vote proposal in 2024 despite historically high but nonbinding votes failing to meet the charter's 80% threshold.
INSIGHT

Precatory Votes Can Mask Legal Limits

  • Precatory proposals can win overwhelming support yet remain nonbinding and ineffective against charter supermajority limits.
  • High support among votes present may still fail if the charter requires a high percentage of outstanding shares.
ADVICE

Push The Board To Propose Charter Changes

  • If you want a binding charter change, push the board to formally propose the charter amendment rather than rely on precatory proposals.
  • Petitioning via precatory proposals can only urge the board; only the board can initially submit charter amendments.
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