Friday, August 12, 2005

Power & Control

In my research I came across the following scene:
During a shareholders meeting to decide the future of the company, the President/ CEO disagrees with the majority of shareholders. After a vote which would replace the President, he decides to discount proxy votes (rendering him the winner). Shareholders object. President turns towards Corporate Counsel and queries:
"You know the law, I will take my direction from you. What should I do?".
The guy (Corporate Counsel) could know just as much, if not less, than the CEO about the legal procedures on counting proxy votes. However, at that moment, his direction determines who controls the company. That's power. (And I don't think I want it.)


Just in case you're wondering how it turns out:
- Corporate Counsel agrees with the President and they declare proxy votes invalid.
- Shareholders take President to court.
- Court says President abused his powers and declared him in breach of his fiduciary duties.
- Corporate Counsel is left immune from prosecution.

If you're interested: Blair v. Consolidated Enfield Corp., [1995] 4 S.C.R. 5, 1995 CanLII 76 (S.C.C.)


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