If you are a business professional, you may have seen the term “proxy” and wondered exactly what it meant. Put simply, a proxy is a person or an entity authorized and empowered to act on behalf of another person or entity. Proxy voting, for example, is a method of granting authority to someone else to vote on behalf of the shareholder during annual meetings and other corporate voting events.
The concept of “proxy” comes from the Latin word “procurare,” meaning to take care of or to manage on behalf of someone else. This concept is important not only in the investing world, but in many other aspects of life where someone may need extra help or guidance making a decision.
What Are Some Examples of Proxy?
Proxy voting works in much the same manner as a power of attorney. When someone is granted a power of attorney, they are given the authority to act on behalf of the person granting the power and make decisions as though they were that person. In the same way, a shareholder grants someone the authority to vote on their behalf during corporate meetings.
Another example of using a proxy is when two people are involved in difficult communications and require a third party’s assistance. The third party acts as the “go-between” and takes on the responsibility of conveying messages between the two parties. This allows the conversations to remain more neutral and reduces the risk of misunderstanding as messages passed through one source only.
Conclusion
In conclusion, a proxy is an individual or entity granted the authority to act on behalf of another person or entity. This concept is important not only in the investing world, but in many other aspects of life where someone may need extra help or guidance making a decision. Examples of proxy include proxy voting, power of attorney, and the use of a third party go-between.