Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
Business Managers of today are living in challenging times. Business targets had never been stiffer, work pressure and managing the complexities of competition is keeping them on their toes all the time. Today, success or failure of a business and the Organisation is dependent wholly upon the Organisation’s ability to be flexible and to respond […]
For improving customer satisfaction it is essential for the supplier to measure it. It is purely believed that if anything is not measurable then it is not authentic. Customers are the most important asset for any organization as they are only responsible to drives the business. Measuring customer satisfaction helps in identifying specific customer information […]
The famous management expert, Henry Mintzberg, proposed a five configurations approach to strategic management wherein any organization can be broken down into five core elements or parts. The interactions between these parts determine the strategy of the organization. The five parts according to Mintzberg are: The Operating Core which consists of those doing the basic […]
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 […]
“Every coin has two sides” Advertising is praised but also criticized by critics in their own ways. Advertising has many positive impacts along with its negative pictures. As the President of American Association of Advertising Agencies, John O’ Toole has described advertise is something else. It is not related to studies, but it educates. It […]
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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