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What the heck is this cumulative voting thing, anyway?
Published May 24, 2003 as
Know how cumulative voting works
Starting with the developer calling for the first election of owners to the board of directors of a new association, the by-laws of an association often references cumulative or non-cumulative voting. This terminology will continue to be questioned and raised as an issue each year thereafter.
The practical application of cumulative voting can become very confusing in the instance of condominium associations when you also have to first compute the weight of each ballot then base it upon the percentage of ownership.
First, what is cumulative voting? Simply put, when the by-laws allow an owner to cast the same number of votes equal to the number of vacancies for only one candidate or less than the total number of vacancies (huh?). Let’s try this again with an example:
There is a five member board, with three seats up for election and six candidates running. On each ballot, an owner can vote for 3, 2 or 1 candidate(s) only. The owner can use three votes for one person, or two, or just one. You have now “weighted” your ballot in order to give one or more candidates an edge.
In the early days of association law, the cumulative voting concept emerged out of corporate law where it was used to protect the rights of minority shareholders. For example, a large corporation would have to accept a candidate on the ballot, such as an individual shareholder representing a minority interest, as opposed to the typical slate of corporate executives. By banding together with other shareholders with similar interests, they could all cast their votes by share-totals for one candidate to guarantee at least one representative on the board who could speak on their behalf.
For condominium and homeowners’ associations, it was a common provision in the by-laws in order to guarantee owners representation on a new board which was still controlled by a developer. In the ‘70s and ‘80s, cumulative voting rights appeared routinely in association by-laws but then passed out of fashion with developer attorneys drafting documents. However, it still appears in many association governing documents.
This eventually evolved into a tool often used or abused by factions attempting to take or maintain control of a board. By creating a slate and convincing people to vote a certain way, they could guarantee winning the election and ultimately retain or seize majority control.
Example – A six seat board election with ten candidates running. A faction could instruct all of its supporters (plus utilizing proxies) to vote for only four people instead of seven. By telling everyone to vote 2-2-2 for some candidates while telling other supporters to vote 1-2-2-2 and so forth, all of the votes could be weighted in favor of the faction’s candidates. By only supporting a limited number of candidates but enough to control the majority, the rest of votes cast by other owners are then spread all over the ballot and diluted.
Where it really becomes confusing and when an experienced property manager earns their money is when condominium ballots have to be weighted by percentage of ownership.
In effect, an owner who owns a .00012% share who votes for George Washington and gives him all three votes in a cumulative voting election has given the candidate 0.00036% of the votes in the election (.00012 x 3). Tally sheets and a calculator or a good computer program make it easy to tabulate, but explaining how it works is difficult.
Proxy forms that are commonly used should point out whether there is cumulative voting when known candidates are identified. Most often people use “Xs” when it is allowed and if there are three vacancies, and an “X” is used, it can only be counted as one vote, not 3.
One other thing about cumulative voting worth noting; it could save a director who is a target for removal from the board. In an association that allows cumulative voting, if less than the entire board is to be removed, no director may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board [Illinois General Not For Profit Corporation Act, 805 ILCS 105/108.35(c)(2)].
Lastly, there is one way a clever candidate can have the effect of cumulative voting even if it is not provided for in the by-laws. The “bullet” vote. If an individual wants to get only himself elected and disregards the other candidates, they tell their supporters to only vote for them. In a multi-seat election it takes a plurality to get elected (top vote getters) and not necessarily a majority, so a single candidate with a large number of single votes will prevail over a group of candidates with votes spread all over the ballot.
In conclusion, cumulative voting was a device used to protect minority voting rights. In practice, it is sometimes a tool for abuse by the power-hungry. In most instances, however, it is not even a factor at all. By understanding it though, an association can sometimes control the voting process and limit or eliminate its misuse.