Professional Documents
Culture Documents
Eportfolio 9 Revision
Eportfolio 9 Revision
Shareholder money is the foundation of the corporation. Directors and officers should
receive input from shareholders. Some may disagree, but directors and officers should be
able to defend their business decisions to the shareholders. This is because having skin in
the game affects the decision making process. For example, in a partnership, partners
have personal liability and so generally make decisions differently. Directors or officers
do not necessarily have the same money on the line. It may be easier to head towards a
riskier or more uncertain field without the downside of liability. Therefore, shareholders
benefit the corporation by acting as a reminder of the potential loss and the necessity of
prudent decisions. The shareholders role is, and should be, limited in order to avoid
ship is moving in the correct direction, but should not interfere with the individual
processes necessary to move in that direction. The reason for this limit is because
Public companies have shareholders that number in the thousands or even greater.
Undoubtedly, these individuals will all have vastly different interests and preferences.
Allowing shareholders to have too much access and influence could mean that they
significantly bog down the operational efficiency of decision makers. The limitations on
shareholder interaction.
I believe that shareholders are most often a neutral factor but can be a very
positive factor. If processes are set up correctly they should facilitate the good actions
and neutralize the detrimental actions. When shareholders bring unique or innovative
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Shareholder Activism and Consumerism Matthew Fredrick
ideas they can be very positive. Shareholders should be heard because they could offer
good insight and have already established some credibility. This is because it requires
some amount of motivation to own shares and participate in the market. This motivation
means the shareholders could be uniquely qualified to offer a good idea. If we assume
optimal operation, the law would neutralize, or empower the corporation to neutralize,
any action that would not be beneficial. Absent these individuals some corporations may
never experience the success we know today. In an ideal world law would help to
facilitate only these positive outcomes. This would include law allowing the unhindered
shareholders. This could even include time-based limits, such as only during certain
meetings, but allow for completely free and open action within those limits. The law
do contribute to corporations, but the law could take steps to ensure a greater frequency
of positive outcomes.
views on the purpose of corporate law. I believe that corporate law should serve a broad
purpose that takes into account practical realities in order to affect positive outcomes for
all involved parties. This could be accomplished through any number of ways one of
which would include shareholder interaction reform. Some of this reform should include
the ability of shareholders to affect greater long term, or more general societal, benefits.
Corporations exercise huge amounts of power and therefore represent a potential for huge
benefit. Benefit to society often can benefit the corporation, and its shareholders, as well.
Since shareholders have a different perspective they may be able to offer different
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Shareholder Activism and Consumerism Matthew Fredrick
suggestions than a director or officer. By creating pathways for shareholders to direct the
disadvantaged groups, and all other interested parties, would benefit. Law should take an
informed and practical view of the corporate form and its operation today. Maybe the
cost requirement for share ownership, or access to becoming the record owner could be
adjusted to allow for greater participation. This view would allow for corporations to be
used to their greatest potential and would clear the way for anyone to access their
benefits. Business is often connected with economic success, which can improve quality
of life. Traditionally business has been used to create barriers to disadvantage certain
demographics. Now, we should use corporations to solve the ills that exist. Whether it is
achievable now, or at some point in the future, corporate law should constantly strive for