Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
Managing customers’ satisfaction efficiently is one the biggest challenge an organization face. The tools or methods to measure customer satisfaction needs to be defined sophisticatedly to fulfill the desired norms. There are following methods to measure customer satisfaction: Direct Methods: Directly contacting customers and getting their valuable feedback is very important. Following are some of […]
Introduction The recent announcement of the change of leadership at the helm of Microsoft has sparked speculation about possible strategic directional changes as well as kindled hopes that the pioneering company and its iconic founder who appeared to be floundering in recent years may well be getting their act together. The ensuing SWOT Analysis places […]
It is very important for an organization to identify the factors and facets which drive customer loyalty. These factors help the organization to manage customer loyalty in a better and efficient way. Following are the drivers of customer loyalty: Attitude: A customer to bear on his loyalty can have following types of attitude: Emotional and […]
International Retailing and branding has been one of the sectors that is seeing exponential growth. With increase in standard of living and disposable income, people in developing countries are getting exposed to international brands. Rise of internet and multi-media has further provided impetus to the dream of people to aspire for branded consumer goods. Along […]
Ethics means a set of moral principles which govern a person’s behavior or how the activity is conducted. And advertising means a mode of communication between a seller and a buyer. Thus ethics in advertising means a set of well defined principles which govern the ways of communication taking place between the seller and the […]
Any public limited or private limited company has shareholders who contribute capital towards the setting up and running of the company. While in the case of private limited companies, the shareholders are usually the promoters and a few close friends or family, the public limited companies have a large body of shareholders drawn from all walks of life.
The shareholders of any company have a responsibility to ensure that the company is well run and well managed. They do this by monitoring the performance of the company and raising their objections or giving their approval to the actions of the management of the company. Whereas many shareholders act through institutional and large investors as their representatives, minority shareholders have the option of expressing either their disapproval or agreement at the Annual General Meetings of the companies.
The concept of having shareholders for the companies is to make the companies accountable for their actions. As mentioned above, the shareholders are usually represented on the board of directors and the board of directors acts as the custodian for shareholder interests.
In cases where the board is not acceding to the requests of the shareholders, the shareholders can act directly by asking the management to convene an extraordinary general meeting so that they can voice their opinions.
In past, the Indian IT bellwether, Infosys has been facing the heat from the shareholders because of its huge cash reserves where the shareholders have demanded that the company buyback some of the shares to compensate for the declining dividends and falling stock prices.
In the West, shareholder activism is usually in the form of putting pressure on the board and the management to take decisions that are in line with environmental, social and ethical norms and this is reflected in the way the global multinational, Vedanta, was forced to drop some controversial projects in India because its shareholders in the UK objected to this on humanitarian grounds.
The point here is that left to themselves, the managements of companies might act in ways that would enhance their personal benefit at the expense of the company. This is where shareholders play a crucial role in mediating between the agency problems and issues of conflict of interest along with asymmetries of information.
For instance, in the recent past, the Public Sector Coal India has been forced to explain several of the decisions taken by its management and the board of directors because of objections raised by the shareholders. The examples that have been cited in this article point to the fact that shareholders can indeed influence the outcomes that the board and the management take on their behalf.
Further, shareholders have a responsibility towards society as well since the companies that they have invested in cannot be allowed to flout ethical and social norms. Hence, the responsibilities of shareholders are many and varied and some of them have been touched upon in this article.
In conclusion, shareholders are increasingly demanding a greater say in the conduct of the companies where they have invested and this is a good sign.
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