I couldn’t find a good non-paywalled paper on this so here’s ChatGPT 4’s explanation of it and why it’s used to elect corporate board of directors.
Cumulative Voting (CV) is a multiple-winner voting system that allows voters to distribute a fixed number of votes among candidates or issues. It enables voters to express the intensity of their preferences by allocating more votes to their preferred candidates or issues, and fewer votes or no votes to those they don’t prefer.
Here’s a summary of how Cumulative Voting works:
Each voter is given a fixed number of votes (often equal to the number of winners to be selected).
Voters can distribute their votes among the candidates or issues as they see fit, either splitting them evenly or concentrating them on a few candidates or issues.
The candidates or issues with the most votes are declared the winners.
Example of Cumulative Voting in practice:
Imagine a small town is electing three members for their town council. There are five candidates running for the positions: Alice, Bob, Carol, Dave, and Emily. Each voter has three votes to cast since there are three positions available.
Voter 1 strongly supports Alice and wants to ensure she gets elected, so they allocate all three of their votes to her. Voter 2 likes Bob and Carol but doesn’t care much for the other candidates, so they give two votes to Bob and one vote to Carol. Voter 3 evenly distributes their votes among Alice, Bob, and Carol, giving one vote to each.
Once all votes are cast, they are tallied, and the candidates with the highest vote totals win the election. This process enables voters to express their preferences more accurately and helps ensure minority interests are represented, as voters who feel strongly about a particular candidate or issue can concentrate their votes, increasing the chances of their preferred choice being successful.
In real-world contexts, Cumulative Voting has been used in various settings, including corporate governance (to elect members of the board of directors) and local government elections (to elect city council members or school board members). One notable example is the adoption of Cumulative Voting for school board elections in Amarillo, Texas, to ensure fair representation of minority groups.
Cumulative Voting is primarily used to elect corporate board of directors because it provides several benefits that address the unique challenges and requirements of corporate governance:
Minority representation: Cumulative Voting allows minority shareholders to have a better chance of electing their preferred candidates to the board. In a traditional, plurality voting system, majority shareholders can dominate the election outcomes, often leading to a board that exclusively represents majority interests. CV enables minority shareholders to concentrate their votes on a specific candidate, increasing the likelihood of their preferred choice being elected and ensuring more diverse representation on the board.
Better expression of preferences: CV allows shareholders to express their preferences more accurately by allocating their votes to the candidates they feel most strongly about. This can lead to a more responsive and balanced board that better reflects the range of shareholder interests.
Reduced potential for proxy contests: Cumulative Voting can help reduce the likelihood of costly and time-consuming proxy contests by providing minority shareholders with a fairer chance of electing their preferred candidates. Proxy contests can arise when minority shareholders feel that their interests are not being adequately represented on the board. By giving these shareholders a better chance to elect their preferred candidates, CV can help mitigate the risk of such contests.
Legal requirements and recommendations: In some jurisdictions, Cumulative Voting is mandated or recommended by corporate law or governance codes. These legal provisions recognize the potential benefits of CV in promoting fair representation and balanced decision-making in corporate governance.
While Cumulative Voting is commonly used in corporate board elections, its principles can also be applied to other contexts, such as local government or community organization elections, where ensuring fair representation and capturing voter preferences are important objectives.