STV for companies and organisations

A wide variety of organisations already use STV to elect their governing bodies see here. However most for profit companies (including Community Interest Companies) do not. What happens is that the nominations committee of the board nominates a just sufficient number of candidates to fill the vacancies. Almost invariably the AGM approves these nominations. There is some logic in this in that there is an argument for a succession plan, and of course if shareholders reject the board’s nominations there are implications in terms of employment law. It is worth noting that company law does not prescribe how directors are appointed or elected, and there could be circumstances in which it is desirable that shareholders are able to influence the composition of the board. The Electoral Reform Society, which is governed by company law, uses STV to elect its council (the board by another name).

In theory Building Societies are supposed to be ‘owned’ by their members on the basis of one man (or woman), one vote. By law they elect their boards or governing councils by multiple X vote. If there are n places to be filled, members indicate support for up to n candidates by putting an X against the relevant names. What normally happens is that the board or council nominates exactly n candidates, and recommends that members vote for all of them. There are usually arrangements for members to nominate other candidates, but in almost every case the candidates nominated by the board or council are elected. The only way a member nominated candidate has a reasonable chance of election is if enough members vote ONLY for him or her. This is very difficult to organise in the face of non co-operation by the board.

STV would give member nominated candidates a much better chance of election; fresh blood could be injected. In view of concerns about the management of our largest remaining building society and the level of ‘compensation’ directors award themselves this is surely needed. But the Building Societies Association say everything is tickity-boo so the government does nothing.

In other types or organisation STV allows fresh blood without encouraging factionalisation. Some company pension funds do use STV.


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