Statutory voting

Statutory voting

The standard rule in most corporations that there is one vote per share in elections of the Board of Directors.

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statutory voting

See majority voting.

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Statutory voting. When shareholders vote for candidates nominated to serve on a company's board of directors, they usually cast their ballots using statutory voting.

Under this system, each shareholder gets one vote for each share of stock he or she owns, and may cast that number of votes for or against each candidate.

For example, if you owned 100 shares, and there were three candidates, you could cast 100 votes for each of them. That means the shareholders owning greater numbers of shares have greater influence on the outcome of the election.

In cumulative voting, on the other hand, a shareholder may cast the total number of his or her votes -- one vote for every share of stock multiplied by the number of candidates for the board -- for or against a single nominee, divide them between two nominees, cast an equal number of shares for each candidate, or any other combination.

For example, if you owned 100 shares, and there were three candidates, you could cast 300 votes for one of them and ignore the others. With this system, people owning a smaller number of shares can concentrate on one or two candidates. That means they may have a better chance of influencing the makeup of the board.