What are weighted voting rights?

Weighted voting rights refer to the mechanism by which voting power is proportionate to the number of shares a stakeholder owns. In this context, each shareholder's voting strength is not equal; rather, it is adjusted according to their shareholding. This means that stakeholders who hold more shares have a greater influence over decisions made by the company compared to those with fewer shares.

In corporate governance, this system often serves to align the interests of larger investors with the overall direction and management of the company, allowing them to exert more control over corporate decisions. This method can be particularly relevant in organizations where strategic direction and control are pivotal.

Other options do not accurately encapsulate the essence of weighted voting rights. For instance, voting based on industry experience or discounts for long-term members do not reflect a direct correlation between voting power and ownership equity. Similarly, while providing higher voting power for larger stakeholders might seem relevant, it does not specifically highlight the adjustment of voting rights from ownership but rather implies a more general preference towards those investing larger sums without the nuance of share quantity.