The Abstention Vote In The Company’s Resolution

As the basic mechanism for the formation of company meaning,the resolution is essentially a process of converting the of group members’ individual meaning into the meaning of the group itself through the majority principle.The individual meaning is the starting point for the formation of group meaning,which means a single choice made by the voters between the pros,the opposition and the abstention.From the perspective of the company’s decision-making operation,it is not uncommon for voters to abstain from voting in the meeting,however,compared with the clear meaning,representation,cause,influence and legitimacy of the pros and cons,the conception and regulation of abstention vote in company law have not received due attention and reflection in the theoretical and practical circles,which urgently needs to be explained and clarified by systematic theorization.Therefore,this paper will analyze and discard the issue of abstention vote in company resolutions from four progressive perspective.The first chapter mainly determines the connotation and extension of the concept of abstention vote.There are two kinds of understandings in the narrow and broad sense of abstention vote.The narrow abstention vote means that the voters does not express an absolute attitude on the motion.What the voters waives is an "absolute statement" rather than the voting right itself,which can also be understood as a negative exercise of voting rights.The narrow abstention vote mainly consists of three forms: express,implied,and fictional.The express abstention means the voters clearly made an “abstention” vote in oral or written way during the meeting.The implied abstention refers to the meaning of abstention that can be inferred from an act or omission of the voters.The fictional abstention means the abstention meaning based on the consideration of the legal policy such as promote the meeting efficiency.Although these three abstention votes formed for different reasons.,but the nature and the meaning of them is exactly the same.The abstention vote in the broad sense also includes the voters’ failure to attend the meeting,which in essence is a factual state rather than meaning representation,and will not play any constitutive role in the formation of the resolution;the overall conception of “abstention vote” must be distinguished from the voting power challenge system.Abstention is the embodiment in which the voters have the legal power to vote but not exercise the power,while in the challenge voting situation the voters are objectively unable to exercise voting power based on specific interests and subject to legal mandatory requirements.The second chapter mainly analyzes the causes of abstention vote through jurisprudential and empirical analysis.When the benefits of exercise voting rights cannot cover the cost of this exercise,the abstention vote becomes the most rational choice.This kind of rational indifference is a special type of abstention cause for shareholders,which is particularly evident in the small shareholders of listed companies.For all types of voting rights holders,the more common source of abstention comes from the neutral position which normally resulted from the limited knowledge or the difficulty to distinguish the advantages and disadvantages of the motion.Specifically,the former one means a voter is not fully aware of the factual information needed to judge the motion due to the company’s derelict information supply or voter’s own insufficient information capture,while the latter means a voter can’t make an absolute choice on the motion because of its limited ability or subjective judgment standards,and both of which will result in a compromise attitude.Of course,in addition to the aforementioned logically self-evident reasons,due to the deficiencies of the majority decision system,abstention vote often act as euphemistic objections in practice,that is,voters will use the name of abstention to oppose in fact,which leads the abstention vote to becomes a seemingly independent but skeletal voting option.The third chapter mainly discusses the positioning and influence of abstention vote in the formation of the company resolution.In an absolute majority criterion that emphasizes substantive justice,no matter whether it is a narrow or broad abstention vote will produces the actual effect of objection.However,in a more scientific and reasonable relative majority criterion,the ideal state of law is to make voters’ every independent choice to achieve the harmony of internal meaning and external effect.However,from the perspective of the existing normative path,since the calculations of the majority do not take into account the independent legal attributes of the abstention vote,the abstention vote is either be treated as negative or favor vote,both of which is deviated from the original intention of the person who really wants to vote abstain,and it also violates the democratic purpose of the majority principle.In order to amend,firstly it should be clear that the abstention vote is essentially a neutral choice of voters who is unwilling to judge or cannot judge.Therefore,the design of majority mechanism should be based on the realization of the neutral impact of the abstention vote,and there are two different paths named the “base deduction method” and the “split voting method”,the former refers to the deduction of the voting weight held by the abstention voters from the denominator of majority calculation,and the latter refers to the division of the voting weight held by the abstention voters,and count half of them in the negative vote and half in the favor vote.Through the comparative analysis of mathematical models,the split voting method can excluding the improper influence of the abstention vote while guarantee the representativeness of the resolution results to a certain extent,so it is the most suitable algorithm for the neutral positioning of the abstention vote.The fourth chapter mainly discusses the legitimacy and imputation of abstention vote.The abstention vote may conflict with the voters identity obligations under the company law,while the ifferences in the identity of shareholders as company owners and directors/supervisors as trustees of the company also determines the severance of their voting rights.In principle,shareholders have the freedom to vote abstain or not,and only subject to the limited circumstances in which the controlling shareholder has to bear the fiduciary duty,but directors/supervisors are subject to the requirements of duty of care and shall not arbitrarily abstain from voting.In order to judge whether the abstention vote of directors/supervisors violates the duty of care,it must be determined by the connotation of the duty of care and supplemented by the rules of business judgment,their abstention vote are only justified under the premise of meeting the decision-making requirements,reasonable knowledge requirements,rational judgment requirements and compliance requirements.Improper abstention and proper abstention are exactly equivalent in legal effect,however,the shareholders’ improper abstention can only be motivated and guided by external relief and deterrence mechanisms,while the directors/supervisors’ improper abstention shall be subject to the corresponding civil and administrative responsibilities under the guidance of the principle of disciplinary punishment and comprehensive consideration of specific circumstances.