Final answer:
In the context of cumulative voting for a board of directors, when Investor 1 and Investor 2 combine their shares, they can control the board with their majority vote count in the Darkroom Windowshade Company. Thus, they can exert significant influence over the company's top management decisions.
Step-by-step explanation:
The concept at hand is concerned with the workings of the board of directors and how they intersect with shareholder interests and corporate governance. In the context of cumulative voting, this is particularly relevant to how power is distributed among shareholders. With cumulative voting, each shareholder multiplies the number of shares they own by the number of director positions available to get the total number of votes they can cast. They can allocate these votes towards one candidate or distribute them amongst multiple candidates.
Using the case of the Darkroom Windowshade Company, let's calculate the minimum number of investors needed to change the company's top management. First, we need to find the number of votes needed for a majority. There are 100,000 shares, so a majority would require more than 50,000 votes. Investor 1 and investor 2 have a combined total of 38,000 shares, which means they have 38,000 votes each for four director spots, or a combined voting power of 152,000 votes. This exceeds the majority needed, which indicates that if investors 1 and 2 vote together, they can indeed control the election of the board of directors.
To determine if this alliance can always get their way in running the company, one must take into account that other shareholders could potentially form a coalition. Yet, with investors 1 and 2 controlling such a significant percentage of the vote, it is highly likely that they can impose their will on top management decisions, assuming no other voting blocks with sufficient shares oppose them.