Introduction
Corporate governance seeks to ensure that companies are managed and operated ethically, responsibly, and transparently, in order to enhance shareholder value, safeguard the interests of other stakeholders, and ultimately foster a healthy environment for a company’s business operations to thrive. One of the ways by which this aspiration is achieved is through effective and efficient representation at meetings. This makes the rules surrounding representation at meetings critical to effective oversight, shareholder empowerment, and the integrity of corporate decision-making. Significant decisions are made at shareholder meetings, which have the potential to alter a company’s trajectory; hence, the need to effectively regulate such meetings in accordance with statutory provisions.
Due to the concept of legal personality, a corporate shareholder holds essentially the same as the rights of an individual shareholder, subject however to the company’s articles of association and any particulars attached to the shares. For instance, both corporate and individual shareholders are entitled to attend meetings personally or through a representative.
This article distinguishes two mechanisms for exercising a shareholder’s voting rights in its absence – proxy and corporate representation. It sets out the legal basis for each under Nigerian law, explains how to choose between them, and and clarifies the confusion that surround the two. Though both involve exercising someone else’s voting rights on their behalf, the terms are not interchangeable.
