Question
Suppose Bob owns 20 shares and Vikki owns 30 shares in Good Company, and there are five members of the board of directors. Under which voting arrangement can Bob assure himself of a board member that represents his interests?
Multiple choice question.
Minority voting
Cumulative voting
Straight voting
Multiple choice question.
Minority voting
Cumulative voting
Straight voting
Answers
GPT-4o mini
To ensure that Bob can secure at least one board member that represents his interests, he should choose **Cumulative Voting**.
In cumulative voting, shareholders can allocate their votes in a flexible manner across board candidates, allowing them to concentrate their votes on one or more candidates. This can give minority shareholders like Bob a better chance to elect a board member who represents their interests.
In contrast, under straight voting, each shareholder typically casts one vote for each position available, making it more difficult for minority shareholders to elect a candidate of their choice, as larger shareholders (like Vikki, who owns 30 shares) can outvote them.
Therefore, the correct answer is **Cumulative voting**.
In cumulative voting, shareholders can allocate their votes in a flexible manner across board candidates, allowing them to concentrate their votes on one or more candidates. This can give minority shareholders like Bob a better chance to elect a board member who represents their interests.
In contrast, under straight voting, each shareholder typically casts one vote for each position available, making it more difficult for minority shareholders to elect a candidate of their choice, as larger shareholders (like Vikki, who owns 30 shares) can outvote them.
Therefore, the correct answer is **Cumulative voting**.