SHAREHOLDERS’ RIGHTS AND RESPONSIBILITIES IN GENERAL MEETINGS CONTENTS Introduction What is a Company? Division Of Corporate Powers Between Board And Shareholders The Role Of Investors In Promoting Corporate Governance Shareholders’ Rights Types Of Shareholders’ Meetings What Constitutes a Valid Meeting? Rights And Responsibilities Of Shareholders In Relation To General Meetings Shareholders’ Rights To Vote At General Meetings Shareholders’ Right To Inspect Register Of Directors’ Shareholdings
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The beginning stage for any thought of the position of minority shareholders is the principle in Foss v Harbottle. This principle‚ which has two strands‚ blocks a shareholder from conveying an activity to seek after wrongs which have been done to the organization. In the first place‚ the executives have been named to deal with the organization’s undertakings and they owe their obligations to the organization; any misfeasance‚ allotment of corporate property or break of obligation on their part is
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Technical Assistance Consultant’s Report The views expressed herein are those of the consultant and do not necessarily represent those of ADB’s members‚ Board of Directors‚ Management‚ or staff‚ and may be preliminary in nature. Project Number: 36027 June 2005 RETA 6137-REG: Corporate Governance Component Prepared by Henry Schiffman For the Asian Development Bank This consultant’s report does not necessarily reflect the views of ADB or the Government concerned‚ and ADB and the Government
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results. The agency problem arises because the objectives of managers may differ from those of shareholders. In financial management objective of the shareholders is primarily to maximise profits thus shareholder value‚ whereas managers may be concerned with personal growth and enrichment through excessive salaries and allowances‚ which automatically diminishes the profit margins for the shareholders hence the principal agency problem. Managers may also invest in wasteful pet projects or buy more
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governance this will allow stakeholders and shareholders to review and evaluate performance of management and the company this ensures that the board of directors and the executive directors of corporations act in the best interest of shareholders and the corporations. It is implemented like a form of company law it is put in place so shareholders are protected and also so that the company is run up to standards is making profits and it is a way shareholders and potential investors know they can trust
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relationship (e.g. offering management performance bonuses to encourage managers to act in the shareholders’ interests). Accordingly‚ agency theory has emerged as a dominant model in the financial economics literature‚ and is widely discussed in business ethics texts. (http://www.referenceforbusiness.com/encyclopedia/A-Ar/Agency-Theory.html#ixzz1ZXkBdMuP) 1.1 CONFLICTS BETWEEN MANAGERS AND SHAREHOLDERS Agency theory raises a fundamental problem in organizations—self-interested behavior. A corporation’s
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liquidation protection - provides that the individual owners of the corporation (the shareholder) cannot withdraw their share of firm assets at will‚ thus forcing partial or complete liquidation of the firm‚ nor can the personal creditors of an individual owner foreclose on the owner’s share of firm assets. This rule serves to protect the going concern value of the firm against destruction either by individual shareholders or their creditors.
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The Role of Stakeholders October 2000 Olivier Frémond The recent history of the stakeholder debate has highlighted the perceived rivalry between the shareholder model versus the stakeholder model: •Shareholder model - the purpose of the corporation is to promote shareholder value •Stakeholder model - the purpose of the corporation is to serve a wider range of interests 1 The role of stakeholders Good corporate governance helps… to ensure Good that corporations take into account
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voluntary organization or association of shareholders; 2. Legal person: It is a legal or an artificial person as a result of law. It has no physical existence; however‚ it functions as a separate and independent legal person. Legal person is distinct from the shareholders and the directors of the company; 3. Perpetual succession: The joint stock company has a perpetual or continuous succession under the law because it continues to exist even if some shareholders or directors die or become insolvent
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directors are agents of the company‚ they are accountable to shareholders and to stakeholders in various guises. It is also clear that as a custodian of something that does not belong them‚ directors owe a fiduciary duty of care to safeguard the company’s assets and maximize returns for shareholders and to ensure that the other stakeholders needs are met as well. The principle that a company is a legal entity by itself and separate from its shareholders‚ directors and managers also lent to the need for directors
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