- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 2. Corporate Governance Mechanisms
CFA Practice Question
Cumulative voting is said to be of benefit to ______.
A. minority shareholders
B. majority shareholders
C. neither of them
Explanation: Cumulative voting gives minority shareholders the option to focus all of their attention on a single candidate or decision point. If multiple minority shareholders focus in a single direction together, they often have the power to enact a change or appointment in their desired direction.
User Contributed Comments 1
| User | Comment |
|---|---|
| kayak | According SEC, "Cumulative voting is a type of voting system that helps strengthen the ability of minority shareholders to elect a director." |