Shareholder

its aim. An analysis of the shareholder and stakeholder theories has led to the conclusion that these two are very much contradictory, resulting in a debate as to which theory will help embrace good corporate governance. This chapter will thus analyse the different reasons why each theory is a much better choice and any drawbacks which make them inappropriate in the modern corporate world. 2. The Shareholder Theory 2.1 Arguments in favour of the Shareholder…

Alfred Rappaport, some executives prefer to address the concerns of the majority of shareholders while neglecting the interest of long term shareholders. It takes approximately ten years of value-creating cash flows for majority of companies to justify their stock prices. It is, therefore, extremely essential for companies to emphasize the pursuit of long term value maximization. In Ten Ways to Create Shareholder Value, Alfred Rappaport outlines governance principles that are necessary for…

firm, namely, between shareholders and mangers, and between shareholders and creditors. Shareholders are the owners of the business. Very often, they do not manage the firm as they lack the necessary expertise. Subsequently, they appoint managers to manage the firm on their behalf. Hence, in this situation the shareholders are the principals and the managers are the agents. In…

pursue shareholder value maximisation among all other available options as it ultimately benefits most, if not all stakeholders. Firstly, they argued that stakeholders will benefit from maximizing the value of shareholders because shareholders have the incentive to take risks and maximise total value of the firm as they are the residual claimants and have diversified risks. As a result, managers are forced put in the extra effort to maximize firm’s value to benefit themselves when shareholder…

came into light after a confession letter from the chairman, Ramalinga Raju, the shareholders in the United States filed a class action suit for claiming damages from the company as well as to audit the firm. While their counterparts in the United States claimed damages, the Indian shareholders were left without any sort of remedy under the then existing Companies Act, 1956. This resulted in the Indian shareholders suffering a huge loss. The researcher argues that it is circumstances like these…

The main stakeholders incorporate shareholders, creditors, employees and the community. There are advantage and disadvantage for stakeholder when dealing with or using a limited liability company (LLC) structure for small businesses in New Zealand. In a limited liability company, shareholders will have many advantages and also some disadvantages under the New Zealand company structure. The shareholders have tax benefits in a Limited Liability Company. Shareholders can choose to be taxed as a…

question. Can an individual shareholder complaint before a court, if some wrong has been done to the company? When this question is raised we have to know that the courts are mostly reluctant to interfere in the internal matters of the company. “It is not business of the court to manage the affairs of the company. That is for the shareholders and the directors” . From this statement we can understand that the control and power of a company is vested in the shareholders. Normally things are dealt…

directors of China Primary Energy Holding Limited in terms of the communication and other forms of engagement with shareholders. The following passage will discuss the topic above in three main areas that are the degree of compliance with Hong Kong GEM Corporate Governance codes, the impact of ownership structure on company’s performance and the effectiveness of communication with shareholders. BACKGROUND INFORMATION China Primary Energy Holding Limited (China Primary) is an investment holding…

Bylaws include corporate procedures and illustrate the powers of shareholders, officers and board of directors (Moran, 1994, p.443). Since bylaws do not have to be filed by the Secretary of State, they can be easily amended and enforced as soon as approval if passed by the board of directors (Sullivan, 2016). The first step…

There are two cardinal principles in today’s western corporate law: the first is, the ‘separate juridical personality’ of each company with rights and duties separate from its shareholders and the second is, politically based ‘limited liability’, shielding shareholders (originally ultimate investors), from personal liability for company’s obligations, by limiting their potential liability to the amount of their capital investment. The above principles, among others, facilitated the separation…