Atos Consulting Look Out | Shareholder Power

Concept

A company’s shareholders collectively own that company. Shareholder
power relates to the influence that stockholders (individuals or
companies, including venture capitalist companies) have and can
execute, thereby dramatically affecting the direction of a company.
Shareholders have, amongst other things, the right to vote on
matters such as elections to boards of directors, the right to share in
distributions of company income, and the right to company assets
during a liquidation of the company.

Trajectory

Companies strive to enhance shareholder value. This management
principle, also known as value-based management, states that the interests
of shareholders should be first and foremost in any business decision.
Sole concentration on shareholder value has been widely criticized. For
the wider society, other aspects like employment, environmental / ethical
issues, or business practices (monopoly) might play a larger role. A
management decision can maximize shareholder value while jeopardizing
global welfare. And exactly this is deemed to have happened in the public
eye. The short-term, profit-maximizing focus has led us to this crisis. The
role of the shareholder is now under heavy debate.
Venture capitalist firms, in the role of shareholder, have been widely
criticized. They have been accused of focusing on short-term value only,
rather than taking the longer-term interest of companies into account.
The financial crises, however, has almost swept venture capitalist firms
from the map, for the time being.

SHIFTING CENTERS OF ECONOMIC ACTIVITY >>

Contact

Atos Consulting
Email

Print friendly
Send feedback