Explain the two devices used to give minority stockholders a voice on the board of directors
The two devices used to give minority stockholders a voice on the board of directors are cumulative voting and voting trusts.
Cumulative voting allows a stockholder to cast as many votes in the aggregate for any one or more directors as is equal to the number of shares owned multiplied by the number of directors to be elected. Under this plan minority stockholders may have some representation on the board of directors, although still a minority.
Under a voting trust stockholders give up their voting privileges by transferring their stock to a trustee and receiving in return voting trust certificates. Thisgives minority stockholders a voice on the board of directors and in large corporations it may give them a controlling voice.
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