FANDOM


As stated in the Medical Committee case, the ordinary business operations exclusion to SEC Rule 14a-8 permits the proposal to be excluded if the company "would lack the power or authority to implement the proposal," meaning a matter of general economic, political, racial, religious or social import. The court continued, "we think that there is a clear and compelling distinction between management's legitimate need for freedom to apply its expertise in amtters of day-to-day business judgment, and management's patently illegitimate claism of power to treat modern corporations with their vast resoruces as personal satrapies implementign personal political or moral prediliction. It coudl scarcely be argued that management is more qualified or mroe entitled to make these kidns of decisions than shareholders."

In Lovenheim v. Iroquois, the court found that proposal was not subject to the ordinary business operations exclusion because it had a "significant relationship to the issuer's business," and also to have "ethical and social significance."