Listen to a Business English Dialogue About Super majority amendment
Grace: Hi Claire, have you heard about “super majority amendment” in business and finance?
Claire: No, what is it?
Grace: A super majority amendment refers to a change in a company’s bylaws or articles of incorporation that requires a higher percentage of shareholder votes than a simple majority to approve.
Claire: Oh, I see. So, it’s like adding an extra layer of approval for significant changes?
Grace: Exactly. Super majority amendments are often used for decisions that could significantly impact the company, such as mergers, acquisitions, or changes to the company’s core operations.
Claire: Are there any specific reasons why a company might implement a super majority amendment?
Grace: Yes, companies may use super majority amendments to protect against hostile takeovers, ensure stability in corporate governance, or safeguard shareholder interests in critical decisions.
Claire: That sounds important. How does a super majority amendment affect decision-making within the company?
Grace: A super majority amendment can make it more challenging for certain decisions to pass, as it requires a higher threshold of shareholder approval, which may lead to more deliberation and consideration of the proposed changes.
Claire: Thanks for explaining, Grace. Super majority amendments seem like a way to ensure that major decisions are carefully considered and approved by a significant portion of shareholders.
Grace: No problem, Claire. They serve as a safeguard for shareholders’ interests and help maintain stability and continuity in corporate decision-making.