Chartered Financial Analyst Level 1

Statutory (or straight) voting gives each shareholder one vote per share for each open director seat, but votes for each seat must be cast separately and cannot be pooled. For example, if there are 3 director positions and a shareholder owns 100 shares, they have 100 votes for each position (not 300 votes to allocate freely). This contrasts with cumulative voting, where a shareholder can multiply their shares by the number of director seats and allocate all votes to a single candidate, which benefits small shareholders trying to elect a director. Voting by proxy is a method of voting (allowing someone else to vote on a shareholder's behalf) that can be used under either system, so option A is not a definition of statutory voting. Option C is incorrect because small shareholders are actually in a better position under cumulative voting, not statutory voting.