CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Governance Influencers

Ganga Textiles Ltd. receives a proxy advisor's report that contains a factual error about its board attendance, recommending votes against a director's reappointment. The meeting is ten days away. Under a sound governance approach, what should the company primarily do?

The company should point out the factual error with supporting attendance records to the proxy advisor and its institutional shareholders, and engage constructively before the meeting. Ignoring the report, withdrawing the resolution or seeking to bar investors is neither proportionate nor legally supported.

AIgnore the report as proxy advisors have no standing
BBring the factual error to the proxy advisor and institutional shareholders with supporting data and engage constructivelyCorrect
CCancel the director's reappointment resolution to avoid opposition
DAsk SEBI to bar the institutional investors from voting

Explanation

Companies should respond to factual inaccuracies by informing the advisor and shareholders with evidence, and engage constructively. Ignoring it risks losing votes; withdrawing the item or barring investors is unjustified and unavailable.

Did you get it right without looking?

One question tells you little. A timed set on Governance Influencers shows your real accuracy, how long you take and where you lose marks.

Practise Governance Influencers Free diagnostic mock

More Governance Influencers questions