Voting Right

Voting Right

The right of some shareholders to participate in the company's decision making process, especially at the annual meeting or at other special meetings. Some decisions, such as friendly takeovers or whether to make a new issue, must be put to shareholder votes, though the list of what decisions are included varies by company. Because voting rights give these shareholders the most control over the company, other shareholders are compensated with benefits, such as guaranteed dividends. See also: Voting stock.

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Voting right. Investors who own shares of a common stock or shares in a mutual fund typically have voting rights, which allow them to participate in the election of boards of directors.

These shareholders can also vote for or against certain propositions put forward by management or by other stockholders. In contrast, investors who own preferred shares or corporate bonds have no voting rights.