Parliamentary procedure in the corporate world

Parliamentary procedure in the corporate world may follow traditional parliamentary authorities such as Robert's Rules of Order or simpler rules of order considered by some commentators to be more appropriate in the the corporate setting.

Parliamentary Manuals

State statutes typically do not prescribe a particular parliamentary authority to be used in corporate meetings. For instance, the Davis-Sterling Act, a California statute, provides that certain business meetings "shall be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt." [ [http://davis-stirling.com/ds/laws/1363.htm Civil Code § 1363 ] ] The ABA Handbook recommends the abolition of parliamentary procedure at shareholder meetings and the strong concentration of authority in the meeting chair, subject to a fairness standard of conduct, concerning virtually all matters of order, recognition, voting procedures, and adjournment. [ [http://www.bowne.com/securitiesconnect/details.asp?storyID=193 Developments In Shareholders’ Meetings: New Delaware Legislation And The ABA Handbook | Bowne Digest ] ]

Donald A. Tortorice's "The Modern Rules of Order", is a parliamentary manual for use in the corporate world. His book includes statements such as "Procedural measures are no substitute for leadership" and "A principal element of these rules is to place the requisite authority in the hands of the Chair to lead the meeting through its business, using these rules as a guide to what should be done and not as an unyielding mandate as to what must be done." However, it is noted that the motion to appeal from the decision of the chair or to declare the chair vacant and elect a new chair remains a procedural safeguard to abuses by the chair. [cite book|author=Tortorice, Donald A.|title=The Modern Rules of Order|pages=12 http://books.google.com/books?id=BJ4NyB-9rP8C&printsec=frontcover&dq=tortorice&sig=AfxJDRz_1JdG4tvKTUnTMEjc5VM]

With specific regard to stockholders' meetings, one legal commentator has noted: [ [http://www.abanet.org/buslaw/blt/8-3conduct.html Business Law Today: Conduct unbecoming a stockholder? ] ]

Court Cases

"People v. Albany & Susquehanna R.R." established that a corporate election will be set aside if a faction of shareholders conducted the meeting in a manner that bore the appearance of "trick, secrecy or fraud." Other cases have further limited the power of the chair, noting, for instance, that the chair cannot adjourn a meeting, even in the absence of a quorum, without a vote of the assembly. [State ex rel. Price v. Dubrul] The principles of majority rule must be followed and cannot be abrogated by the chair. [Aberdeen Angus Breeders Ass'n v. Fullerton]

References