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On many proxy vote forms, as a shareholder, you can vote "for" or "withhold" on some board of director members and appointment of an auditor. You can vote "for" or "against" for some other proposals.

If they use plurality voting for the board members, and the number of candidates equals the size of the board, doesn't that guarantee that the outcome is always that the candidates are all elected, regardless of the votes?

Canadian corporate laws generally provide that directors are elected, either on an individual basis or by slate, through "plurality voting." Under plurality voting, shareholders vote "for" or "withhold" their votes in respect of each nominee director or slate of directors. Shareholders are not provided the opportunity to vote "against" nominee directors or slates of directors, and the "withheld" votes are not counted in the tally of votes, meaning that a nominee director or slate can be elected if only one vote is cast "for" such nominee director or slate, even where the majority of shareholders are opposed to the election of such nominee director or slate. Canada is a global outlier in this respect.

https://www.bennettjones.com/Blogs-Section/TSX-Clarifies-Mandatory-Majority-Voting-for-Director-Elections

Here are some examples of such proxy vote forms:

Victor
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1 Answers1

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Generally, shareholder vote requires 50%+1 to pass a decision (generally, because it depends on the corporate bylaws and in some companies different share classes have different voting power). So if enough people "withhold", the resolution will not pass and in this case - the director will not be appointed.

This is not an election in a sense you're thinking of for political offices, this is more of "appointment" than election. You usually do not have multiple candidates running for a position, but rather the board, or large shareholders, propose their candidates, or resolutions, and the whole body of shareholders ratifies or not that proposal.

littleadv
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