It is a clause that regulates the right to nominate candidates. It implies that one or more persons have the right to nominate candidates for some or all of the directorships.
Its effect is to limit the choice of the general meeting to one or more lists of candidates, which can be done by using the technique of share classes or quality clauses. However, the general meeting must retain an effective right of choice
It can therefore be used, for example, to enable minority shareholders to secure majority representation on the board.
