A corporate action is a step taken by a publicly-traded company that affects the securities (shares and other financial instruments) issued by the company and usually sets off a process that impacts the holders of those securities.
Some examples of corporate actions include: stock splits, dividend issues, mergers and acquisitions, and spinoffs. Each corporate action serves a different purpose.
A mandatory corporate action is when all holders of a share are required to partake in the corporate action. i.e. they have no choice. A cash dividend is an example of a mandatory corporate action.
However, strictly speaking the word mandatory is not entirely appropriate because partaking in the corporate action doesn't require the shareholder to do anything. In most cases they are just a passive beneficiary of these actions.
Mandatory corporate actions may be taxable.