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