What characteristic differentiates cumulative voting from statutory voting?

Cumulative voting is a voting method that enables shareholders to allocate their votes in a more flexible manner when electing a board of directors. This characteristic is key in distinguishing it from statutory voting, which is a more traditional voting practice.

In cumulative voting, each shareholder has a number of votes equal to the number of shares held multiplied by the number of directors to be elected. Shareholders can then distribute their votes among the candidates as they wish. For example, a shareholder could choose to give all their votes to a single candidate or distribute them among multiple candidates. This approach aims to give minority shareholders a better chance of electing a candidate of their choosing, as it allows for more strategic voting.

On the other hand, statutory voting restricts the voting process to a one-vote-per-seat allocation for each candidate. This means that shareholders cannot pool their votes for a single candidate but must instead cast one vote for each seat, limiting their flexibility and often favoring majority shareholders.

The other options provided do not accurately describe the fundamental mechanics of cumulative versus statutory voting. Cumulative voting is not exclusively used for large corporations, and it does not allow votes to be combined for a single candidate in the same way statutory voting limits them to one per seat. Thus