Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
The business of retail has always been evolving with technology. Companies which have been at the helm of technology have dominated the retail sector. Consider the case of Wal-Mart which reached new heights in retail thanks to pioneering the RFID based inventory system. Similarly, Amazon has been using its technological advancement to give tough competition […]
Advertising simply put is telling and selling the product. Advertising Management though is a complex process of employing various media to sell a product or service. This process begins quite early from the marketing research and encompasses the media campaigns that help sell the product. Without an effective advertising management process in place, the media […]
Realising the fact that urbanisation and exposure to visual media has provided more exposure to the kids, retailers have stepped in to create and nurture the new segment. We see all the leading brands including fashion as well as sports and retailers promoting kids collection separately and exclusively. The market in terms of kids and […]
Introduction The macroeconomic environment that Starbucks operates in is characterized by the ongoing global economic recession, which has dented the purchasing power of the consumers. However, market research done in the last few months has indicated that consumers have not cut down on their coffee consumption and instead, are shifting to lower priced options. This […]
To say that we are facing a resource crunch seems obvious to anyone who is remotely tuned into the present day global economy. However, instead of beating one’s hearts and lamenting the looming resource crunch does not solve any of our problems. Instead, the solution lies in innovating, moving beyond vertical integration and into non-linear […]
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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