Shareholder Consultation

There is a legal obligation to consult shareholders on matters that affect the company’s future. They have the right to vote on major decisions, including actions that may dilute their holdings such as rights issues and employee share options schemes. If they can muster 5 per cent of the company’s equity or 100 shareholders to back them, they can even intro­duce their own resolutions at the meeting.

Source: Becket Michael (2014), How the Stock Market Works: A Beginner’s Guide to Investment, Kogan Page; Fifth edition.