Flashcards in Session 3 Deck (16):
What are the differences in shareholder power in listed companies?
- spread between many individual and institutional shareholders
- dominated by institutional shareholders
- with a single majority shareholder
- in which some large shareholdes form a block
- a family company listed with outside shareholder but with a majority of voting shares in family hands
- still run by the founder
- but is the subsidiary of another company
What are the pros and cons of the complex chain of intermediaries, acting as agents, between company and owner?
- ultimate owner is an individual who invests in a private pension fund
- which invests some of its funds in a hedge fund
- which in turn invests in a fund of funds to hedge its risk
- which invests in a commercial property fund
- which places some of its funds in the hands of a financial
- which invests ultimately in a listed company
- but lends the shares as collateral for a deal it has made
Which rights does a ownership usually provide?
- have your details in shareholder members' register
- receive notice of all shareholder meetings
- receive the formal company accounts, directors' and auditors' reports and other statutory notices
- attend all shareholders' meetings
- vote, either in person or in proxy, at shareholder meetings
- view the company's statutory records, including the register of members, the register of loans charged against the company's assets, the register of directors, officers and company secretary, and the register of their share interests
- receive dividends that have been duly declared for that class of share
Which rights doesn't a shareholder have?
- attend internal meetings of the company
- access management accounts or other corporate information
- get involved in management matters
Which decisions were in shareholders' annual general meetings (AGM) striked?
- approval of the accounts presented by the directors
- approval of the re-appointment of auditors
- payment of dividends proposed by the directors
- approval of transactions between company and connected persons
- appointment and re-appointment of directors
What is the shareholder democracy in the 19th century?
one share - one vote
reflected power of ownership
What is the shareholder democracy today?
- shareholders are numerous, geographically spread, and have different expectations of the company
- shareholders include corporate institutional investors as well as individuals
- one share - one vote. no longer provides shareholder power
How does shareholder activism look?
take a number of forms of communication and negotation
What does shareholder activism involve?
- media campaigns
- blogging to change corporate practices
- proxy battles advancing shareholder resolutions to force change
- calling shareholder meetings
- litigation against companies of their directors
Why can activism be controversial?
- shareholders, having elected their directors, should allow the freedom to act without having their business decisions second-guessed
- separation between shareholders and top management
Which activities do companies with pro-active shareholder relation have to inform?
- both existing and potential shareholders
- securities analysts
- financial community
Which forms can a shareholder relation activity take?
- routine and special reports
- inter-active web sites
- shareholder meetings
- press conferences
- road shows
- one-on-one communication and meetings with individual shareholders to resolve questions and explore issues about the company's strategies, policies and financial standing
What is a holding company?
the company at the head of a group pyramid of companies. Its board of directors is often called the 'main board'
What is a subsidiary company?
one in which the holding or parent company holds all or a majority of the voting shares in that company
What is a associated company?
one in which the holding company, through not holding a majority of the share has sufficient interests to control it and determine its actions