Editing Openai/68df4a3a-428c-8013-a459-5cff8e17edde (section)

=== User: Shareholders Rights ===
Shareholders Rights
Shareholders control a corporation by electing the Board of Directors, who then oversee management. Voting rights are based on shares owned and following the principle of “one share, one vote”.
Directors are selected at annual meetings with various voting systems:
* Cumulative Voting: Allows minority shareholders to concentrate their votes on fewer candidates, increasing their chance of board representation. A shareholder holding more than 1/(N+1) of the shares (N is the number of directors up for election) is guaranteed at least one seat.
* Straight Voting: Directors are elected individually, with votes casts separately for each seat. Majority shareholders dominate as those holding over 50% of shares can ensure board representation.
Example 15.1: In JRJ Corporation, stock sells for $20 with cumulative voting and 10,000 shares outstanding. To secure one of three board seats, an investor must buy 2,501 shares at the price of $50,020. This works because the remaining votes cannot be distributed among other candidates to take over that seat. The example illustrates how straight voting can exclude minority shareholders, leading to some states requiring cumulative voting. However, corporations often reduce its impact by staggering elections, where only part of the board is elected at a time.
Effects of staggering:
# Makes it harder for minority shareholders to win a seat under cumulative voting.
# Deters hostile takeovers by reducing the chance of quickly replacing a majority of directors.
However, staggering can be beneficial by ensuring continuity and institutional memory on the board which supports long-term corporate planning and projects.

is this a good enough synopsis