You wish to be on the board of directors of a company. If you wish to buy as low a percentage of the total outstanding shares as is necessary to guarantee yourself a seat on the board, you should look for a firm that has ____________.

Question

Quizplus · Accepted Answer

Cumulative voting common stock gives minority shareholders a better chance of gaining representation on the board of directors by allowing them to concentrate their votes on fewer candidates. This means you would need to buy a lower percentage of the total outstanding shares to guarantee yourself a seat on the board compared to other voting methods, such as straight voting.

You Wish to Be on the Board of Directors of a Company