Advance Notice Bylaws

One governance issue that has received scant attention has been the use of advance notice bylaws to prevent shareholders from nominating directors.  For a post on these provisions, go here.  They typically require that all nominations to be submitted to the board some period of time (often a lengthy one) before the meeting.  Failure to meet the terms of these bylaws may result in the omission of the nominee from the ballot.  

In Openwave, discussed elsewhere on this page, a shareholder nominee received the most number of votes.  The company, however, argued that the director was not nominated properly under two advance notice bylaws.  Despite noting that "there is little question that the bylaws at issue are poorly drafted and could easily lead to some confusion," the Chancery Court determined that the matter could not be resolved on summary judgment.