The Hostile Takeover, Part II seems to fall apart with the realization that boards do not vote in order like that, but all at once, and may change their vote during the voting. You can postulate such a Board, but it’s fairly unlikely such a thing would exist.
And it also falls apart with the fact that parliamentary law would not allow such a maneuver even if voting worked like that. It is simply not permissible to pass resolutions that hurt individuals that vote against them.
What would actually happen:
1) The lackey says: I move that we vote upon the following: that if this motion passes unanimously, all members of the of the Board resign immediately and are given a reasonable compensation; that if this motion passes 4-1 that the Director who voted against it must retire without compensation, and the four directors who voted in favor may stay on the Board; and that if the motion passes 3-2, then the two ‘no’ voters get no compensation and the three ‘yes’ voters may remain on the board and will also get a spectacular prize—to wit, our company’s 51% share in your company divided up evenly among them.
2) The rest of the Board look at each other and one of them says: I move we postpone that indefinitely because, frankly, that’s complete nonsense, and possibly not even legal.
3) Someone seconds that.
4) The board votes that the original motion should be, indeed, be proposed indefinitely.
(A funnier variant involves amending the motion so the lackey is removed instead, and everyone but him is given reasonable compensation whenever they resign.)
Board of Directors, under pretty much all legal system, operate under Robert’s Rules of Order by default, and under Robert’s Rules of Order there are certain things even a majority can’t do, like punish members for voting specific ways.
Exceptions are indeed allowed if the bylaws say so, but this hypothetical company apparently has bylaws that say ‘A majority of board of directors can literally do anything they want, even stuff expressly required under Robert’s and state law to be in the bylaws.’ That’s not likely.
And then, after allowing anything in the bylaws, the Board itself previously decided to override the reasonable default rules or order to make an absurd order-based voting system and require the board to cast votes on crazy things the majority of the board does not want to vote on and has decided to allow members to be punished or rewards for their votes. (And apparently doesn’t have any way to make amendments to motions.)
And at that point the major question it: What would stop the Board from just disallowing new appointees any voting rights, and further all authority of the Board is now permanently held in a group that’s composed of the four existing board members and someone else they’ve selected? In the hypothetical world you’ve set up the Board can just appoint and operate a shadow Board, well in advance of anything the lackey can do. This is completely crazy, of course, but apparently the bylaws allow the Board to do anything.
Robert’s Rules of Order are not Nomic, and weren’t written by stupid people.
Don’t fight the counterfactual. This clearly takes place in an alternate universe with different norms. The board didn’t use RRoO, they used a system of their own devising that involves voting in order, on the basis that it would help avoid hostile takeovers. We don’t know what the usual rules are, and frankly they don’t matter.
The Hostile Takeover, Part II seems to fall apart with the realization that boards do not vote in order like that, but all at once, and may change their vote during the voting. You can postulate such a Board, but it’s fairly unlikely such a thing would exist.
And it also falls apart with the fact that parliamentary law would not allow such a maneuver even if voting worked like that. It is simply not permissible to pass resolutions that hurt individuals that vote against them.
What would actually happen: 1) The lackey says: I move that we vote upon the following: that if this motion passes unanimously, all members of the of the Board resign immediately and are given a reasonable compensation; that if this motion passes 4-1 that the Director who voted against it must retire without compensation, and the four directors who voted in favor may stay on the Board; and that if the motion passes 3-2, then the two ‘no’ voters get no compensation and the three ‘yes’ voters may remain on the board and will also get a spectacular prize—to wit, our company’s 51% share in your company divided up evenly among them. 2) The rest of the Board look at each other and one of them says: I move we postpone that indefinitely because, frankly, that’s complete nonsense, and possibly not even legal. 3) Someone seconds that. 4) The board votes that the original motion should be, indeed, be proposed indefinitely. (A funnier variant involves amending the motion so the lackey is removed instead, and everyone but him is given reasonable compensation whenever they resign.)
Board of Directors, under pretty much all legal system, operate under Robert’s Rules of Order by default, and under Robert’s Rules of Order there are certain things even a majority can’t do, like punish members for voting specific ways.
Exceptions are indeed allowed if the bylaws say so, but this hypothetical company apparently has bylaws that say ‘A majority of board of directors can literally do anything they want, even stuff expressly required under Robert’s and state law to be in the bylaws.’ That’s not likely.
And then, after allowing anything in the bylaws, the Board itself previously decided to override the reasonable default rules or order to make an absurd order-based voting system and require the board to cast votes on crazy things the majority of the board does not want to vote on and has decided to allow members to be punished or rewards for their votes. (And apparently doesn’t have any way to make amendments to motions.)
And at that point the major question it: What would stop the Board from just disallowing new appointees any voting rights, and further all authority of the Board is now permanently held in a group that’s composed of the four existing board members and someone else they’ve selected? In the hypothetical world you’ve set up the Board can just appoint and operate a shadow Board, well in advance of anything the lackey can do. This is completely crazy, of course, but apparently the bylaws allow the Board to do anything.
Robert’s Rules of Order are not Nomic, and weren’t written by stupid people.
Don’t fight the counterfactual. This clearly takes place in an alternate universe with different norms. The board didn’t use RRoO, they used a system of their own devising that involves voting in order, on the basis that it would help avoid hostile takeovers. We don’t know what the usual rules are, and frankly they don’t matter.
Why should anyone care about a strategy that only works in a universe that isn’t the one we live in?