by Donald Clarke for FT Alphaville
Alibaba shareholders are aware that they can’t elect a board majority even if they hold a majority of shares. But they might be surprised to learn that they can’t evennominate directors—any directors—let alone elect a few to a board minority, no matter how many shares they own.
By now everyone knows about Alibaba’s special governance structure. News reports and Alibaba’s own disclosures tell us that the founders, via an entity called the Alibaba Partnership, can appoint a board majority no matter how few shares they own. What seems to have escaped general notice, however —and is nowhere specifically stated in the prospectus —is how the rest of the board is selected. Remarkably, public shareholders have no right even to nominate directors, let alone elect one, no matter how much stock they own. Read more here.