COMMENT

Subsection (a) incorporates the approach of Del. Code Ann., tit. 8, § 141(d), as amended, S.B. No. 93, 1987. There was no counterpart in former Georgia law, nor in the Model Statutory Close Corporation Supplement. It specifies what is implicit in Section 14-2-801: that contractual alterations in the way a board of directors may operate are without limit. Thus, directors' votes may be weighted, so that a large shareholder entitled to two or more representatives on a board, whether through agreement or class or cumulative voting, may obtain the same voting representation through a single individual. This avoids the need for "dummy" directors who only vote as instructed by another person, in order to obtain voting power on a board.

Note to 1989 Amendment The 1989 amendment added the phrase "or a bylaw adopted by the shareholders" after "articles of incorporation" in the first sentence. This made the procedures consistent with those of § 14-2-806(a), which permits staggered boards (and terms of directors) to be established either in articles or bylaws. It is also more consistent with Article 9, which generally permits alterations of the standard form to be provided either in articles, bylaws, or an agreement among the shareholders ( § 911(b) permits alterations of share transfer restrictions only in the articles; § 914 permits adoption of mandatory buy-back provisions in the articles; § 920 permits alteration of board power in any agreement in writing among the shareholders; § 920(d) permits elimination of the board entirely through articles, bylaws or shareholder agreement, while § 920(e) and § 933 permit a provision for shareholder dissolution only in the articles). On the other hand, the more drastic provisions of § 920(a), which permits elimination of the board of directors, requires unanimous consent, as an agreement among "all the shareholders." Provisions that merely allocate voting power among classes of shares are traditionally permitted to be adopted by the majorities generally required for amendments of articles of incorporation which, under subsection (d), requires approval of the holders of two-thirds of the shares of each class of shares of the corporation.

Note to 1990 Amendment The 1990 amendment provides that the term and voting powers of directors elected by a class may be specified in either the articles of incorporation or a bylaw adopted by the shareholders.

Cross-References Articles of incorporation: amendment, see Article 10, Part 1; generally, see § 14-2-202. Board of directors: action, see § 14-2-801 et seq.; standards of conduct, see § 14-2-830 et seq. Bylaws: amendment, see Article 10, Part 2; generally, see § 14-2-206. Incorporators, see § 14-2-201. Number of directors, see § 14-2-803. Subscriptions for shares, see § 14-2-620. Terms of directors: generally, see § 14-2-805; staggered terms, see § 14-2-806. Voting by voting groups: amendment of articles of incorporation, see § 14-2-1004; generally, see §§ 14-2-725 &14-2-726. "Voting group" defined, see § 14-2-140.

RESEARCH REFERENCES