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Answer to Question #6536 in Economics of Enterprise for LaMarcus Streeter

Question #6536
Use the Internet to research an instance where a significant dispute has arisen based on a corporate valuation.
Determine what additional steps can be taken in the valuation of a corporation to avoid instances like the one you researched from occurring in the future. Provide specific examples to support your response.
Expert's answer
To avoid disputes next steps could be made:
- Rules on how decisions are taken should be included in the company’s articles of
association and/or shareholders’ agreement. The Chairman should refer to these
in situations of potential conflict;
- Each director will have one vote, and decisions will be carried by a simple majority
on a show of hands. The chairman may have the right to exercise a casting vote
if votes in favor of and against a motion are equal; check the articles. It
should also be remembered that on certain issues individual directors may be
prevented from voting by a conflict of interest;
- if there aren't enough directors at a board meeting to take a decision the company's shareholders would then need to call a general meeting to either appoint new directors or amend the
articles;
- etc.

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