Question

Explain a proxy war that occurs before a shareholders meeting. Make an example and explain. Why to these occur, what is their function. Explain.

Answer 1

Proxy war is an unfriendly challenge for control over an organization. This event often occurs as corporate shareholders develop contrary to certain aspects of corporate governance, most of which focus on leadership and management positions. Corporate activists may try to persuade shareholders to use their proxy ballot (i.e., elected by an individual or institution as an authorized representative) to install new controls for some reason. Shareholders of public corporations may appoint agents to attend shareholders' meetings and vote on their behalf. This agent is a shareholder proxy.

Example
Companies frustrated by management rights protections can start proxy to install more consistent target management.

In proxy wars, leaders and managers now have the opportunity to line up in their favor on those who try to force a change of company. These employees use a variety of corporate governance approaches to stay in power, including: surprise councils (for example, with different directors) governing corporate financial rights and creating restrictive regulations. As a result, most proxy wars fail. Recently, however, it has been noted that hedge fund-led proxy war succeed more than 60% of the time.