Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
Last few decades have changed our world beyond recognition. There has been unprecedented progress in all spheres of life. Technology and scientific advancement has played major role affecting all parts of the economy, politics as well as markets. With globalization and opening of markets we see a lot of changes in the way business is […]
Setting up a web page and promoting online business has become a necessity for all business organisations, irrespective of the size of the organisation and the business. Every minute, several thousands of people from all over the world are accessing the internet and searching for products and information. A few hundred of them could be […]
Brand evokes the responses. There are many people who love their Apple iPod or love their car etc. There are certain feelings that come to your mind when you think about your favorite brands. People expect that these brands should demonstrate brand promises every time whenever they are, encountered. Inconsistencies in the performance of services […]
Talking about product leadership in the market and understanding all about the organizations that have achieved such leadership can be very valuable and practical knowledge for the aspiring business managers as well as marketing managers of tomorrow. World over we are familiar with the stories of upstart entrepreneurs who made it big in the business. […]
What happens to the Data we Leave Online All of us who exist online and on social media websites as well as use Apps would have noticed that we enter a humungous amount of information about ourselves and our likes and preferences as well as dislikes and our objections. For instance, any registration to a […]
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.
Your email address will not be published. Required fields are marked *