Question

Suppose you own 100 shares of stock and the company is voting to replace 2 members of the Board of Directors. You cast 200 votes for one candidate to replace a current board member. You can do this only if the corporation deploys:

Select one:

a. Traditional voting

b. Cumulative voting

c. Articles of incorporation

d. Preemptive rights

Answer 1

In a regular voting system, the shareholders have a right of 1 vote per decision. In a cumulative system, suppose you have 100 shares and 2 directors are nominated, you can cast all your votes to 1 shareholder. This helps minority shareholders to atleast elect 1 director of their choice. Hence, the correct option is-

B. Cumulative voting

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