The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1870-06-08
Minority Representation in COrpO-
Tations.

TaIionS.
From ne Railroad Ga.sitS.
A few weeks ago we urged the prOprie-
ty Of minority representation in Boards
Of Directors. We hardly hoped that what
we urged would be provided by law, At
least for years to come. But the subject
has attracted the attention and approval
Of she Constitutional Convention Of this
State, and n few days ago It adopted the
following section Of an article reported by
the Committee Of the Whole on MisCellA-
ncous Corporations:
SECTION /. The General Assembly
shall provide by law, In all elections for
directors or managers Of Incorporated
companies, every slockholer shall have
the right 10 vote in person, or by proxy,
for the number Of shares Of stock owned
by him for as many persons rs there are
Directors or managers 10 be elected; or to
cumulate said shares, and give one Candi-
date as many votes as the number Of d.
recton multiplied by his shares Of stock
shall equal; or 70 distribute them, on the
same principle, among as many candi-
dates as he may think fit; and such Di.
reCtOrs or managers shall not be elected
in any other manner allGr the adoption Of
this Constitution.
Let us see how this will work, We
will suppose that one party OF the stock.
holders Of company hold fVe-ninths Of
the stock. According 10 the present Gus
tom itw Ould elect all the Directors, and
might not only pursue 4 policy in opposi-
ton 10 the the wishes Of the other four
ninths, but keep these stockholders abso.
lutely In Ignorance Of the condition Of
their property and the use made Of Il
This Is rs II, in o finn Of five equal part
ners, three should not only decide all mat
tiers connected with the business, but
never consult with the Others, and even
refuse to let them know how they had de-
termined to carry on tho Affairs Of the
firm. But according TO this new law the
party Of four.ninths would agree to sup.
port as many Directors as their stock
would elect Suppose their stock TO
amount TO 10000 shares, and the number
OF Directors 10 be thirteen. Each share
having thirteen votes, the majority would
elect seven and the minority six oil tho
Directors. Il is evident that the rights Of
the minority Of the stockholders would be
much better protectcdif they had six out
Of the thirteen Directors than II they had
none OF course the majority would con-
troll the company's policy and direct It's
management, as Is quite proper, but II
would find It hard TO take any unfair ad-
vantage Of men whose representatives
were in council with them. . ....
The effect, and the advantage, OF this
plan Of elections will appear in other cases
where the minority Is less; as, for instance,
where stakeholder, With some peculiar
interest outside Of tie corporation, has
reason TO fear that his private interest may
be uDjustly injured by the corporation,
lie may have stock enough 70 elect sin.
gle director, and thus constitute himself u
Waterman and a guardian Of bis peculiar
interests. lie could do nothing and pre-
vent nothing, il may DO said, and this is
very true and ought to DO true OF all fair,
honest and straightforward measures; but
the majority will not b likely 70 cheat
him while he Is looking on, and It is espe-
cially 10 secure honesty Of management
and respect for all the rights Of all the
stockholders that this plan Is urged. II
the new constitution Is adopted, this pro
vision will 60 into effect next August.