TheCorporateCounsel.net

Now may a good time for calendar year companies to do a little housekeeping in advance of the post-holiday annual reporting rush. This Bryan Cave blog says that one item that should be on your agenda is a review of your corporate bylaws. This excerpt identifies some specific areas to take a look at:

– Calling of special meetings of shareholders – Consider the list of who has authority to call special meetings. Typically it includes the CEO and a majority of the board. A state may require that persons in certain positions or a specified percentage of shareholders have the authority to call a meeting. Inclusion of a minority of the board may create risks in the case of board dissent. Some companies permit a specified percentage of shareholders, with detailed informational and procedural requirements.

– Conduct of shareholder meeting – Sometimes overlooked, particularly in legacy bylaws, detailed authorizing provisions can clarify the authority of the board or a presiding officer as well as address questions of validity in light of the silence of many corporate statutes.

– Virtual shareholder meetings – Even where clearly permissible under corporate statutes, it may be prudent to affirm the permissibility of virtual meetings in bylaws as well.

– Notice of shareholder meetings – Although eproxies have been common for some time, consider whether notice provisions may need to be better aligned to the company’s practices.

– Advance notice provisions – If not updated recently, consider reviewing informational and procedural requirements for currency and to ensure they aren’t “overtly unreasonable.” If applicable, similarly review any special meeting or written consent provisions for consistency of informational requirements and, to the extent applicable, procedural requirements.

The memo also points out that companies should also review their shareholder approval thresholds in order to ensure compliance with state law and the consistency of corresponding proxy disclosures. The NYSE’s recent clarification of how it interprets the “votes cast” on a particular proposal provide yet another reason to take a look at this provision of your bylaws.

– John Jenkins