Posted by: admin : Category: Shareholders are, very simply, those who own a company’s shares. They will be entitled to receive a portion of any dividends that are issued by the company. Depending on the type of share held, they may also exercise voting rights, allowing them to participate to some degree in the overall management of the company. Typically, shareholders play a role in selecting the members of the board of directors. They may be asked to approve the issue of new shares and dividends on existing shares.
Shareholders can be either individuals or organizations. Financial organisations such as banks, building societies and unit trusts often exert great influence on large companies through their larger shareholdings. If they are unhappy with the company’s performance, they can often force changes in management structure or personnel. Once a year, most companies hold a shareholders’ meeting, in which the company’s performance over the year will be discussed, the directors may answer the shareholders’ questions and future plans will be discussed. It is not mandatory for shareholders to attend these meetings and most do not.
The shareholders are the lawful owners of the company and, in most countries, directors of the company have a legal obligation to serve their interests.