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Objectives
Shareholder activism and its influence on corporate governance, To clearly role, to understand think in make they why a
have
encouraging necessary
Cont
The rights of shareholders and their equitable treatment, The importance of corporate
governance to share holders, Pros activism Etc etc and cons of shareholder
Introduction
Organisations are made up of Boards of Directors Stakeholders, and Management And are govern by some rules and regulations which they have with.
Stakeholders are groups of individuals who are related to the company either Directly, or Indirectly
CUSTOMERS
SUPPLIERS
Shareholder
A stakeholder group Whose Rights are enshrined in law Lehrich (2011) defined Shareholder as owner of a corporation.
Cont
A shareholder is an individual, institution, firm or other entity that owns shares in a company (ICAG, 2010). They are the people who invest their money to provide risk capital for a
Rights of a Shareholder
Entitled to benefits from profits (Dividend) Be part of decision making process (AGM) To question or resist any decision made or being made by management, eg. Mr. Ofori and GCB
Cont
Investment is secured from impersonation or any type of fraud. Access to information Use shares as collaterals for accessing credit
Corporate Governance
Involves a set of relationships between a companys management, its board, its shareholders and other stakeholders (OECD, 2004)
Cont
The way a corporation protects the interests of its shareholders and other financiers (Kokemuller, 2012).
Our definition
a system by which companies plan, organize, direct and control resources effectively and efficiently, to increase profit with strong emphasis on stakeholders welfare and adherence to the regulatory framework governing the organisation.
arrangements to shareholders
Cont
Rules and procedures should be
clearly articulated for shareholders to understand Same equitable treatment to every shareholder Costs and benefits of exercising
company, talking to directors etc Use of Equity stake to put pressure on management or exert influence over business management.
Cont
Looking standards BUT not seeking to instigate to improve corporate
Shareholders who exhibit such characteristics are referred to as Activist Shareholders. Thy usually have large shares in the company They attempt to gain control and
Components of Activism
voting with ones feet (exit), private discussion with or public corporate
communication
boards and management, press campaigns, blogging and other e-ways of public
Cont
openly talking to other shareholders, putting resolutions, calling shareholder meetings and, ultimately, individual seeking directors or to the replace entire forward shareholder
companies
Cont...
Cons Issue with selling Shareholders can sometimes be wrong Different investment Horizon
Conclusion
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