Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
In this dynamic market with the free flow of information and innovative marketing programs, needs and wants of consumers are always changing. As per capita income increases consumers are willing to explore more alternatives for purchase decision. Companies should be aware of changing situation all the time to take the right decision. This calls for […]
Scaling Techniques for Measuring Data Gathered from Respondents The term scaling is applied to the attempts to measure the attitude objectively. Attitude is a resultant of number of external and internal factors. Depending upon the attitude to be measured, appropriate scales are designed. Scaling is a technique used for measuring qualitative responses of respondents such […]
Building relationship with customers in current market trends is the most important aspect that an organization should focus on. Distinction and eminence are now most sustainable and affirm for which developing good relationship with customers is must. Some of the substantial outcomes of building a quality relationship is explained below by which need of relationship […]
Introduction This article analyzes the strategy of the world’s leading furniture retailer, IKEA using the SWOT Methodology. The company was founded in 1943 and is known for its simple yet effective approach to retailing with the DIY or the Do It Yourself concept, which ensures that the company keeps costs to a minimum and passes […]
As a merchant, using affiliate marketers is your business is a difficult task. This is because affiliate marketers are themselves individual businesses. They need to be motivated and rewarded. It is the duty of the merchant or of the affiliate network to ensure that the affiliates are well paid. In this article, we will discuss […]
The previous articles discussed how shareholders play an important role in promoting good corporate governance. This article looks at the patterns of shareholder ownership that are prevalent in organizations in the corporate world. To start with, any company whether it is private or public limited needs to have shareholders who contribute equity to the setting up of the company and who in turn trade the shares so as to enhance the market value of the firm. In this way, shareholders exercise ownership over the company with their stake in the company.
The forms of shareholder ownership can be in many ways and some of them include outright control of the company by the majority shareholders, participation on the board of directors in proportion to their holding in the company and finally, being minority shareholders in a company and having voting rights accordingly. These patterns of shareholder ownership are more or less followed all over the world.
Turning to the aspect of exercising control over companies, shareholders often resort to having their representatives on the board of directors who would then see to it that the interests of the shareholders are being taken care of. This is the dominant view of the shareholder ownership where the numbers and the way in which a majority stake is held by a particular shareholder bestow ownership rights to the shareholders. Of course, theoretically speaking, all shareholders are owners of the companies and accordingly have power over the actions of the company. However, in practice, it is usually those with the greater numbers who exercise control over the companies. Hence, it can be said that shareholder ownership follows democratic principles wherein the largest shareholder has more control than the minority shareholders.
It is often the case that shareholder ownership is seen as a phenomenon that is fraught with risk. This is because the shareholders by virtue of their holdings represent ownership which can also boomerang if the company goes belly up. What we mean is that since shareholders are owners of the companies, in case of failure they take the hit as well. This is not the case with those who own debentures and bonds in the companies. Hence, it is the shareholders who are liable for risks. On the other hand, as long as things are going fine, it is the shareholders who reap the rewards for their holdings and their risk taking behavior.
Finally, shareholder ownership is a phenomenon that allows for fair corporate decision making and a sense of responsibility and shared risk taking.
The point here is that without a body of investors who would be willing to invest in a company, the promoters might not be able to raise the capital that is needed for the firm. Further, the risk is spread out over more numbers rather than the promoters having to shoulder the entire burden. In these ways, the shareholder ownership has evolved to the point where it has become a prerequisite for good corporate governance.
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