Explain What Rights a Proxy Confers, Why and by Whom

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The Answer is A proxy transfers the voting rights of one shareholder to another person and is frequently executed by those shareholders who wish their voice to be heard at a meeting of shareholders, which they are unwilling or unable to attend. By the same token, these votes may be actively solicited by someone who does plan to attend and is seeking a block of votes to sway a particular decision to be made at the meeting. As these meetings are the shareholder's opportunity to exercise power in reviewing the efforts of the existing board of directors and to re-elect them or elect their successors, this voting is a powerful right. The existing board will be interested in soliciting proxies to ensure their continued tenure, and disgruntled shareholders will be interested in solicitation to see the reverse. As such, proxy solicitation from shareholders who have no particular strong feelings in either direction and no interest in attendance, will be lively. Even a small block of votes, where the remainder are widely held, not voted, or voted with a random dispersion, can be an effective control block. A solicitation of proxies must be accompanied by an Information Circular which discloses who is doing the solicitation and their ownership or interest in the company. Information requirements depend on whether the solicitation is being made by management or by other parties. Any limitations on revocation of the proxy must be stated, as well as the manner in which the proxy is to be employed. The proxy can well be used for matters beyond the election of directors, such as particular acts of management under consideration, the appointment of a particular firm of auditors, property acquisitions, or changes to share capital.

Explain What Rights a Proxy Confers, Why and by Whom

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