When Required. Cumulative voting applies under the following conditions:
- Governing Documents. Although optional under Corporations Code §7615(a), the Davis-Stirling Act requires the inclusion of cumulative voting on ballots if permitted in an association's governing documents. (Civ. Code §5115(e).) That means notice must be given to the membership of their right to cumulate their votes so all members can exercise that right. (Corp. Code §7615(b).) To satisfy the requirement, notice to cumulate votes should be given in the voting instructions when ballots are mailed to the membership.
- Director Elections. If cumulative voting is required (as described above), it only applies to director elections and only when more than one director is being elected to the board. Sometimes, however, bylaws may require that more than two seats be open for cumulative voting to take effect. Accordingly, associations must review their documents when adopting election procedures. If an association is under developer control, more than two positions must be open before cumulative voting applies. (Calif. Code of Regulations §2792.19(b)(1).)
- Director Recalls. If the governing documents require cumulative voting in the election of directors, it will also apply to membership removal of individual directors.
How It Works. If there are 5 directors who serve 1-year terms, then all 5 come up for election each year. Under cumulative voting, members have 5 votes which may be distributed in any manner they choose (so long as no more than 5 votes are cast):
5 votes for one candidate, or
4 votes for one candidate and 1 for another, or
3 votes for one candidate and 2 for another, or
2 votes for one candidate, 2 for another, and 1 for a 3rd, or
1 vote each for 5 candidates.
A voter can also choose to throw away votes. For example, a voter may cast 2 votes for one candidate and no votes for any of the remaining candidates, or any combination described above but casting less than five votes (up to and including a blank ballot).
Formula. The formula to calculate the number of votes needed to guarantee a candidate's election is as follows:
V = number of votes needed to block removal
D = total number of directors authorized at the time of the director's most recent election were then being elected
M = total number of members eligible to vote
Eliminate Cumulative Voting. There are no true benefits to cumulative voting. No municipal, county, state, or federal election procedure uses it. Cumulative of voting is intended for use by stock corporations so small shareholders can have a voice. Otherwise, companies would be completely dominated by large shareholders. Cumulative voting is automatically included in a new homeowner association's bylaws so as to give owners a voice when the association is controlled by the developer. Once the developer is out of the picture, there is no need for cumulative voting. As described in Robert's Rules of Order:
[T]his method of voting, which permits a member to cast multiple votes for a single candidate, must be viewed with reservation since it violates the fundamental principle of parliamentary law that each member is entitled to one and only one vote on a question. (Robert's Rules, 11th ed., p. 444.)
The problems with cumulative voting far outweigh any theoretical benefit related to minority interests. Cumulative voting makes it easy for disruptive, fringe, and single-issue candidates to get on the board. Moreover, once a problem director has been elected, cumulative voting makes it almost impossible to remove that director from the board. With conventional voting, i.e., casting one vote for each candidate, candidates must seek a broader base of support thereby increasing the likelihood that more moderate, business-like candidates are elected. If a director is dysfunctional, a conventional (non-cumulative) voting system allows the membership to more easily remove the director from office.
Removal of Directors. Cumulative voting greatly complicates the removal of directors from the board. See Director Recalls.
Amendment. Because cumulative voting applies only if it is authorized by an association's governing documents, associations can amend their documents to remove it. The right to repeal cumulative voting is provided for by statute. (Corp. Code §7615(a).)
Recommendation: To simplify elections and reduce costs, associations should also consider eliminating quorum requirements for the election of directors and eliminating proxy voting.
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