Some voting agreements expressly provide how votes will be cast. First, the agreement may require each signatory to give to a third person an irrevocable proxy to vote the signer's shares in accordance with the agreement. Usually this irrevocable proxy arrangement will be enforced today. In a voting trust , the shareholders who are part of the arrangement convey legal title to their shares to one or more voting trustees , under the terms of a voting trust agreement. But they no longer have voting power.
Most states enforce voting trusts, if they conform with statutory requirements.
The trust must generally be in writing , and must be implemented by a formal transfer of the shares on the transfer records of the corporation. If not, the court is likely to hold the entire agreement unenforceable. The corporation sets up two or more classes of stock, and gives each class different voting rights or financial rights. If the shareholders agree to restrict their discretion as directors , there is a risk that the agreement will violate the principle that the business shall be managed by the board of directors. If a court finds that the board's discretion has been unduly fettered, it may refuse to enforce the agreement.