5 steps a shareholder / business owner can consider taking to correct corruption
1. Become informed: The old adage, “knowledge is power” still holds true; if you are armed with proper knowledge, your chances of identifying and curbing corruption are significantly greater. To obtain the requisite knowledge it is important you attend and participate in annual shareholder meetings, board meetings, and/or other meetings where management is present and information is shared. Listen to and understand, if possible, the reasoning behind why certain action are or were taken. Set aside time to talk with management and others about why certain things are or were occurring. Finally, if you have a proper purpose, submit and conduct a records inspection upon the business.
2. Document wrongdoing: While attending the annual meeting and/or board meetings or while conducting a records inspection make sure to document – in writing – any red-flags, concerns, or other issues. Take notes, make copies, obtain audio recordings, keep e-mails and other documentation you receive from or relating to the business, etc…
3. Voice your concern: Once you have made the effort to attend the meetings, inspect the records, and/or talk with management you must express your concern(s). As the title of this article states, the squeaky owner get the grease. Put another way, the only way to get attention and make a change is to take action and express your position. Keep in mind, while it is important to understand the reasoning behind certain actions / issues, do not wait to express your concern until it is too late. For example, if a vote is taken and you fail to object or vote against a certain proposal or issue, you may be estopped (prevented) from contesting the action / issue in the future.
4. Propose alternative solutions / corrections: Proposing an alternative solution or correction to an issue may remedy your problem without further action. In the unfortunate event your proposal does not correct the problem, the simple fact that you proposed an alternative solution or correction will likely lend credibility and support to any future action you take – either within your business or through litigation.
5. Make a written demand: If you alone or you and others are being harmed by the action or inaction of corporate management, you may consider sending a written demand that the business take certain action(s). In many circumstances, before you can file a lawsuit or a complaint with the Court, you must make a demand upon the corporation.
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