It’s still not a democracy, but at least other people have noticed, too


I'm glad I'm not the only person to notice that elections for boards of directors are completely rigged so that the nominees always win and there's nothing you can do about it. It appears that the issue was the hot topic in this year's proxy war skirmishes.

This year, one company actually called me at home asking me to send in my proxy. I guess they didn't have enough votes for the meeting to be held. I explained that not voting was an intentional decision on my part, since it was the only way I could prevent the board of directors from being elected. The caller appeared mollified by that explanation and didn't press the issue further.

Comments (14)
  1. Peter Ritchie says:

    RE: "elections for boards of directors are completely rigged so that the nominees always win".

    I couldn’t resist:  Why would you want someone who wasn’t nominated to win?

  2. Grant says:

    Peter,

    In 2002, Iraq had a 100% voter turnout and Saddam Huessien won with a landslide 100% of the vote.  Of course it helped that he was the only person on the ballot.

    Voting for "None of the Above" is the only valid way to register a vote against cantidates in cases like this.

    http://www.nota.org/

  3. kbiel says:

    Proxy fights do happen, other people can be elected to the board and shareholders can generally make life difficult for the board if they choose to do so (depending on the corporate charter).  Of course, this all takes more involvement by shareholders than signing or not signing a proxy.

  4. Peter Ritchie says:

    Grant, with board of director’s voting you generally need things like a quorum and minimum votes to validate the whole process.

    Democracies and dictatorships don’t necessarily have a process like that.  In Canada (where I am) there isn’t a "None of the Above".  You can spoil your ballot; but counts for that aren’t used to affect the outcome of the vote.

    As for the US, it would depend on the level of government.  Federal doesn’t use the common vote, directly, for electing the President–I would imagine the Electoral College also does not have a "none of the above".  I expect if the "founding fathers" didn’t trust the common vote to elect a President, they wouldn’t give the Electoral College a way out…

  5. Miles Archer says:

    So, if you don’t like it, sell your stock!

  6. James says:

    Reminds me of my old university, where all the student elections had "RON" (Re Open Nominations) as a candidate in every race. Every candidate had their photograph next to their name, to help identify them; RON’s "photograph", of course, was Ronald McDonald.

    I don’t recall him winning any races off-hand, but I do think having him on the ballot was a good move: even for uncontested offices, there was still a choice.

  7. Tony Cox [MSFT] says:

    In the interests of gender-balance, my university alternated between RON and TESSA (This Election Should Start Again).

  8. Phil Wilson says:

    Home Depot went one further this year at their annual meeting. No vote counts at all.

    http://msnbc.msn.com/id/13231109/

  9. Norman Diamond says:

    I agree with the idea of selling (or not buying in the first place) shares of companies whose management you disagree with.

    I sure wish that were possible with countries.  If you don’t like the policies of someone who became president with 100% of the vote, don’t live there.  If you don’t like the policies of someone who became president with the second-largest minority of the vote, don’t live there.  That was why, when someone asked what country I wanted to live in, I answered the moon.  Though I figured out too late that he meant the word "want" differently.

  10. James says:

    Norman: In a sense, you can: you have one share (yourself), and you can move it to any other country that has an opening for you. Places like North Korea try very hard to stop you selling their stock, of course, and getting a share in the US is much more difficult than a lot of other less popular "investment targets", but people still manage it.

  11. silkio says:

    James: Duh. But obviously there are substantially more choices with substantially less impact on your everyday life in the realm of buying shares.

    It’s easy to say "vote with your feet" in regards to your country; but if you really disagree why don’t you do something about it, rather then walking away.

  12. Grant says:

    Peter, I guess what I was trying to say is that instead of "wanting someone who wasn’t nominated to win", Raymond wanted someone who WAS nominated to lose.  NOTA isn’t really used in here the US either, but if it was maybe we would find out that a good portion of the 50% of people who are "too apathetic" to vote actually think all the cantidates are jerks.  In the same way, not voting so that the quorum (hopefully) isn’t reached sends mixed signals, where being able to forcibly vote against someone sends a stronger and more accurate message.

  13. TomF says:

    I too have received phone calls from various firms I have invested in, wanting to know why I didn’t send in my proxy form. I politely tell them that I have done that on purpose, and they try to convince me that sending in a "no vote" is better. Perhaps for them, but not for my principles. If I can help eliminate a quorum, then I have done my job.

    I have heard of NOTA being used elsewhere in the world and each political election I wish it was present here. Then voter apathy would not be so great, IMHO. I am so tired of voting for the "least offensive" alternative.

  14. James says:

    Silkio: Changing the UK to my liking would be a much greater undertaking than changing my location – and unfortunately, we get very little real say in most things (no ‘proposition’ system, just regular elections – and even those are often pretty much pre-determined, thanks to ‘safe’ constituencies).

    TomF: It isn’t used here either, for "real" elections – the nearest you can get is either voting for a joke candidate (with the associated risk he might actually win!) or ‘spoiling’ your ballot paper (the number of invalid ballots gets counted and announced along with the number of actual votes cast), neither of which is really satisfactory.

    I could be cynical and suggest the reason the government won’t make that change is fear that "they all suck, give us better choices next time" would win by a landslide…

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