Q My co-op has not had elections in many years, as the number of candidates always equals the number of seats on the board. This year, however, there will be more candidates than seats. Someone mentioned that we are supposed to have cumulative voting. The bylaws say that all voting shall be based on shareholders having one vote for each share and the majority decides any corporate action? Is this cumulative voting? What is cumulative voting?
“The Business Corporation Law of New York (BCL), applies to and governs almost all cooperative corporations in New York. It sets forth all of the rules for governance and outlines just what other provisions (or deviations from the normal rules) a corporation may have, and exactly where these provisions should be found.
“The BCL provides that cumulative voting may be used in elections of directors, if the Certificate of Incorporation so provides. A provision in the bylaws of a co-op alone is not sufficient. Therefore, in determining whether a cooperative corporation has cumulative voting, the Certificate of Incorporation must be reviewed, for a review of only the bylaws will not be helpful.
“Cumulative voting is a concept which gives shareholders in the minority a greater chance for representation on the board. With cumulative voting, a shareholder gets to vote the number of votes equal to his shares multiplied by the number of seats to be elected. This ‘cumulative’ number of votes may be distributed between candidates in any manner. Thus, the cumulative number of votes may go to one candidate, two candidates, or more (up to the number of seats up for election). The votes may be distributed equally among those getting the votes, or unequally in the discretion of the shareholder.