The use of online in the electoral process concerns not only the act of voting but all stages: the creation of the electoral register, voter identification, processing, and presentation of results.
The role of boards in corporate structure
The purpose of the boards is to improve the quality of management of the organization, work on its sustainability, increase income and market share prices. Corporate governance at the enterprise must be built into an effective system. Perhaps a reliable and professional board of directors is a key link in it. The effective work of the entire company depends on the tasks that he sets, what topics he considers at meetings, with what thoroughness he checks and analyzes the information provided by management.
If the general meeting of shareholders makes the most important decisions related to the company’s activities, then decisions related to the general management of the company’s current activities are made by a special body of the company – the board of directors elected at the general meeting of shareholders. By the legislation, the board of directors exercises general management of the company’s activities and has broad powers. However, its members are responsible for the improper performance of their duties.
The procedure of board election
Elections to the board of directors of a joint-stock company determine a predete-rmined number of winners among candidates who will then become members of the board. Thus, the problem of proportional representation arises. Its essence lies in the fact that the structure of the board of directors corresponds to the structure of ownership of the company’s share capital, i.e. major players were represented on the board in proportion to the number of their shares.
The members of the supervisory board are elected by the shareholders every year during the general meeting. If a shareholder owns at least 2% of the shares, then he has the right to nominate candidates for the post of member of this body. In this case, candidates must give their consent. If the shareholders do not have the written consent of the candidate to participate in the elections, there is a possibility that after being elected he will not want to join the board of directors and will have to hold re-elections.
Board meeting voting protocol includes the following types of voting:
- Simple voting is used if the shareholders who have voting shares are represented in the company in the amount of no more than 1,000 people. In this case, they vote in favor of the candidates they like. Thus, the board of directors includes members with a simple majority of votes.
- Cumulative voting is applied in the event of elections of members of the supervisory board with the number of shareholders owning shares exceeding 1 thousand. At the same time, at the legislative level, companies with less than 1,000 shareholders are not prohibited from prescribing rules on cumulative voting in their statutory documents.
The cumulative method has its characteristics:
- the number of shareholders’ votes is multiplied by the number of persons who must be members of the board of the company;
- shareholders have the opportunity to vote for one candidate based on their shares or split their votes among several candidates;
- the number of persons equal to the composition of the board of directors who have received the majority of votes in the general list of candidates is elected to the board of directors.