What are the different types of shareholder protection?
Governments and stock exchanges have enabled the protection of shareholders to prevent corporations from inappropriately using the shareholders' money. These laws are designed to check the actions of the proceedings by being more responsible to shareholders. The most important forms of shareholders' protection is the right to sell their shares, vote on important decisions of the company, select members of the Board of Directors and Sue, when the management acted against shareholders. Laws on the protection of shareholders are warmly discussed by the topic in the administration and management of companies and the debate has seized shareholders and strengthened their forms of protection. Overall, the laws on the protection of shareholders are weak, but they are improving and institutional investors - often the largest shares holders - are the most effective group of shareholders in influencing management.
The most basic protection of shareholders is the right to buy and sell shares. To help corporations in this process. They must give Sharyho -Guideline, detailed publication of financial results, operations and major events that can shareholders in Johich sales or purchasing decisions of assistance. Shareholders who participate in the annual shareholders' meetings may vote on important corporate matters; Those who do not participate can vote by completing the representative before the meeting. The most important vote is the approval of new members of the Board of Directors. Other problems voting about shareholders include compensation, merger and changes in critical business.
The annual meetings of shareholders are important for shareholders to express their concerns. Shareholders can also propose non -serious resolutions, and if they have sufficient support, all shareholders can vote for or against the resolution. The growing trend is for companies to adopt approved unrelated resolutions.The final shareholder is the right to proceed the action. When shareholders believe that the management has grown grossly, they can sue the individual manager and/or society. It pissedIt is in the game when shareholders believe that this insufficient performance suffers from an economic consequence.
Institutional investors often have greater rights and protection than individual investors. Institutions include mutual, pension and hedge funds. These investors have more capital than a typical individual investor and can therefore invest more. Their investment is greater, so institutional investors are able to influence management and see policies admitted to their advantage.
The US Congress passed the Law on the Protection of Shareholders in 2010. The law was in response to a court decision that interpreted the first amendments to freedom to include corporate political gifts. Many US citizens were outraged by a court decision, so Congress acted. The law limits the maximum total number of political contributions to $ 50,000 in the US. A company that wants to spend more must obtain approval from most ownership of shareholders through voting.
several weaknessesIn the laws on the protection of shareholders, they make them only slightly useful. Shareholders have the right to vote on important decisions of the company, but in many companies the decision of the shareholders are non -binding. Sometimes shareholders can choose candidates for open advice positions. The management or board of directors more often selects candidates. In the event of poor management, shareholders face significant financial burdens in the implementation of court proceedings, so a joint recommendation for shareholders who disagree with the management is to sell their shares and sell from the company.
Laws on the protection of shareholders are important in many countries. Securities laws are a sign of how the country is a friendly and economically developed country and the protection of shareholders is an important part of Securitzakon. In addition, the administration and management of companies is a prominent international business trend whose protection of shareholders is an important part. Many countries establish their laws on US laws, but include variations for their own market. Cultural, political and socIo-economic differences encourage differences in the rights and protection of shareholders.