Shareholder and Activism

Shital Jhunjhunwala ()
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Shital Jhunjhunwala: University of Delhi

Chapter Chapter 6 in Corporate Governance, 2023, pp 129-144 from Springer

Abstract: Abstract Understanding how shareholders can protect their interest (Rights and Responsibilities). Shareholders, as primary stakeholders exercise their rights by participation in General (Shareholder) meetings to discuss and deliberate with management and among themselves about the company affairs and get involved in corporate decisions by voting on matters such an appointment of directors and declaration of dividend. The power of shareholders when they exercise their rights was demonstrated in the annual general meeting of Lakshmi Vilas Bank where none of the directors, nor the auditor were reappointed. Shareholders are to be given adequate prior notice ranging from 10 days (New Zealand) to 42 days (The Netherlands) of the AGM, to enable their participation. The notice is accompanied with the agenda and other relevant information that will be required to take decisions. Additionally, a small percentage (varying in different countries) of shareholders can add an agenda or even request that a general meeting be held. The introduction of e-voting has further empowered small and far-flung shareholders as they can now easily vote even if they cannot attend the meeting. Shareholders have a fundamental right to information—material and timely, through various reports that are to be included in the annual report and extensive disclosures on the company website or a designated common platform. When a shareholder views that companies activities are not in alignment with their interests, they may sought to activism. Shareholder activism may be defined as the various actions undertaken by investors to influence and monitor corporate management and boards and to bring about changes in the organizational control structure of firms not perceived to be pursuing shareholder-wealth-maximizing goals. Shareholders may choose to exit or voice their concerns through various forms including legal recourse such as class action lawsuit.

Keywords: Shareholders; e-voting; Activism; Class action; Stewardship code; Annual general meeting; Notice; Institutional activism; Proxy firms; Shareholder agenda (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-2707-4_6

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DOI: 10.1007/978-981-99-2707-4_6

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