Can the top brass of a company make all decisions for the company without consulting the (esp. common) stockholders? Are there any laws forcing the top brass to put some decisions up for a vote, or is it simply a matter of “whatever is best for business”?
And, if not, then all we (the little guys) can do is sell out fast?
The shareholders have the right to elect the directors of the corporation. The directors employ the managers, from CEO on down. Almost all business decisions are made by the hired management. Certain decisions must be approved by the directors; some others must be approved by the shareholders. Exactly what these decisions are depends on the bylaws of the corporation and the laws of the state or country of incorporation. Typically, shareholders must approve changes in the bylaws, the creation of additional shares in the corporation, mergers and acquisitions, and similar large issues.
Pretty much. If the officers or directors do something to advance their own interests at the expense of the corporation, such as having the corporation give them money, you could probably sue them successfuly. Also, as Nametag points out, the shareholders must frequently approve major corporate changes such as dissolutions and major mergers. Otherwise, you’re usually stuck with the “Wall Street Rule,” i.e. if you don’t like the way the company is being run, sell your shares.
(standard disclaimer about legal advice)
Corporations with cumulative voting rules are advantageous to the (somewhat) little guy.