| The cumulative voting system was successfully introduced into Chinese Company Law revised in 2005 due to the request by academia and various circles of the society. The statute provides that the cumulative voting system is not the mandatory rule, but in practice most of the sample listed corporations have adopted the cumulative voting system in their articles. Such practice cannot be separated from the attitude of Security Regulatory Bodies and Stock Exchanges towards the cumulative voting system, who are inclined to make it mandatory, and data demonstrates that it does not mean the cumulative voting system has been carried out by those companies for the election of directors. Meanwhile, empirical study on the cumulative voting system adopted by the sample companies for the election of directors in 2012 indicates that it is not effective at all in more than half of these companies even though they carried out the system correctly.Although the status of "one share dominates exclusively" still exists in the current structure of stockers of the sample companies, the cumulative voting system is valuable to all of them because the share proportion held by the controlling stockholder are not enough to make the system meaningless. The reason why the cumulative voting system cannot be carried out is that there are still many problems to be solved, such as the rules of nomination, the election principles and the election methods of directors, single-candidate elections, low attendance of shareholders' meetings, and improper voting, etc. The cumulative voting system has the function of protecting minority shareholders if it is designed as a real system. |
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