1.2.2.2. Right to Vote on Relevant Matters
Holders of common stock generally have voting rights as a privilege of ownership, as defined in the issuer’s charter and bylaws. They can vote to elect the corporate board of directors and to approve corporate resolutions, such as mergers and acquisitions, and for changes of business direction. They do not have a right to vote on whether the company should pay a dividend. Interestingly, the rule on whether a stock split requires a shareholder vote varies by state. Voting takes place at a regular annual shareholders’ meeting, at which the shareholders elect board members, company managers present financial information, and the attendees conduct other business as needed. Shareholders may also request an extraordinary general meeting to present an urgent issue.
The board of directors represents the interests of the shareholders. The board establishes policies, decides whether the company should issue a dividend and how much it should be, and decides the hiring/firing and compensation of the company’s chief