A proxy statement is a legal document that lets you give your vote at member meetings to someone else. Why would you want to do that? Because member meetings can be LONG, and have stretched for days, and even weeks. If you don’t want to wait until the vote is called, then a proxy statement will let someone else cast your vote for you.
A “proxy” is someone listed on the proxy statement that pledges to be there at the meeting for you and cast your vote. Most proxy statements have multiple people serving as proxies so that if something happens to one of them at the time a vote is called, then the remaining proxy holders can still vote. Being a proxy holder is a huge commitment, since it means you have to attend an entire meeting, even when the board drags it on for hours in an attempt to discourage people they don’t like from voting.
Proxy holders must work together to try to vote according to the wishes of the people they hold proxies for. In the case of a board election, if a member of a slate of board candidates decides to withdraw, then the proxy holders should vote for a different person that represents the will of the people they represent.
Additionally, giving your proxy to a group of people that you agree with gives them some additional powers. If proxy holders clearly hold the majority of votes at a meeting, then they can vote on a variety of things at a meeting, including approvals of minutes, agendas, changes in bylaws and more. It can help the meeting go quicker and more smoothly.
What does it mean to send in a proxy, but check off “disapprove” or “withhold”?
Proxies can be quite complicated. Sometimes proxies will have a variety of issues or candidates listed with “approve” and “disapprove” listed as options. What does this mean? Why are they there?
These checkboxes are required to be on the proxy by law for certain kinds of companies, and in particular, nonprofit corporations. You are telling the proxy holder to vote a certain way on these particular issues, and the proxy holder is bound by law to vote how you indicate. These checkboxes allow a person to say that they are “present” at a meeting for purposes of establishing a quorum so that the regular business of the meeting can continue, but to also say that they “abstain” from voting on other issues.
HOWEVER, proxies usually give very broad powers to the proxy holder. The proxy holder can vote however they choose on all other issues at the meeting, and all future meetings. You would only want to sign a proxy if you trust the proxy holder. If you are voting “disapprove” or “withhold”, then it likely means you do not trust the proxy holder to support your interests, and you have just given that person a lot of power to represent you.
For example, a proxy holder can use your proxy to control the agenda of the meeting. If the proxy holders have been directed to vote a way that they don’t like, they could use the proxies to simply remove the item from the agenda.
Generally, you should not give someone a proxy and then check “disapprove” or “withold” if you support the opposition. You should instead give your proxy to the opposition, ONLY. If you sign a proxy for both sides, the latest proxy you sign takes precedent.