On June 7, the shareholders of one of the world’s largest corporations, General Motors, nearly voted to adopt proportional voting for future elections for the Board of Directors. Almost 49% of shareholders supported cumulative voting over the current winner-take-all system. The proposal for cumulative voting won the highest percentage of the vote of any non-board-recommended measure in GM history.
Under a cumulative voting system, voters can cast as many votes as
there are seats to fill. But unlike traditional, winner-take-all
systems, voters are allowed to “plump” multiple votes on one or more
candidates. If adopted by GM, this method would allow a minority of
like-minded shareholders to elect at least one board member by
concentrating their votes on a single candidate.
According to Rob Richie, executive director of FairVote –the Center for
Voting and Democracy, “Cumulative voting would promote more accurate,
balanced representation of the spectrum of the shareholders’ opinions.”
In GM’s current winner-take-all system, the Board’s decisions reflect
the will of a majority of the majority. Under a cumulative voting
system, however, the board’s decisions would reflect the will of a
majority of the entire range of shareholder interests, more accurately
representing the “true majority” of shareholders and ensuring greater
accountability in board decisions.
Many other corporations currently use proportional voting methods to
elect their Boards of Directors. About 10% of the S&P 500 use
cumulative voting, including Aon, Sears, Roebuck and Company, Toys 'R'
Us, Walgreen's and Hewlett-Packard. It has also been recommended by
many corporate reformers and socially conscious investment firms such
as CalPERS, Parnassus Investments, Calvert and PAX World Fund.
For more information, or to seek comment on these issues, contact Ryan
O’Donnell, FairVote’s Communications Director at (301) 270-4616 or
email@example.com, or visit www.fairvote.org. For detailed information
on cumulative voting in corporations, please visit www.fairvote.org/cumulative .