Purple Dumps Its PRPLS

Most US public corporations are mostly controlled by their boards of directors, who sort of loosely answer to the shareholders.1 The shareholders get to vote to re-elect the directors every year, but the directors generally run unopposed, serve as long as they want and choose their own successors. And most big corporate decisions are made by the directors, or by the executives they appoint and supervise; the shareholders only rarely get a vote on those decisions.2 The shareholders are in some loose sense the owners of the corporation, and in some loose sense they get to supervise the directors, but in most practical senses, most of the time, the directors are in charge and the shareholders are pretty much along for the ride.

Not always, though. Some companies have controlling shareholders who do have the practical power to remove directors. Sometimes an activist will buy a big stake in a company, run a proxy fight, and try to get its own proposed directors elected instead of the incumbents. And some corporate decisions do have to be ratified by a shareholder vote. Most notably, the decision to sell the company requires a shareholder vote, and the decision to authorize new shares — to let the board issue more shares than are currently authorized in the corporate charter — also requires the approval of a majority of the shares.