The paper "Governance in a Globalizing World " is an outstanding example of a business assignment. It is through the Annual General Meeting that the shareholders appoint both the management and the company auditors who are watchdogs. Shareholders have rights at the Annual General Meeting (AGM) which include the right to vote, which is one of the most important rights. Shareholders have the power to appoint and dismiss the management because at times they lack faith in the management regarding the ability of the management to represent their interests (Shareholders) or their own interests (Management), contrary to the Stewardship theory which beliefs that left on their own, management will always act to the best interest of the shareholders (Schlueter, 2007).
Additionally, mostly, the management pays themselves hefty allowances which might not be justified by the performance of the company, thereby going against the socio-economic theory. Therefore, the only tool the shareholders have to safeguard their assets is through voting An example that demonstrates the right to vote is in relation to the case of Mr. Murray, who was the chairman of Metcash (IS IT TIME FOR METCASH CHAIRMAN ROB MURRAY TO RESIGN?
2016). Having been previously the chairman of Dick Smith at its collapse and later appointed to be the Chairman of Metcash, shareholders felt he should be changed (IS IT TIME FOR METCASH CHAIRMAN ROB MURRAY TO RESIGN? 2016). However, though he himself never wanted to resign, the shareholders wanted him to resign and the only way this could be done was to enable the shareholder's vote in an Annual General Meeting (AGM) and decide whether Murray was going to be appointed back or not.
This clearly demonstrates how shareholders can exercise their right to vote and influence company decisions and activities. How they affect company activities and decisions Voting is a very powerful right. Through voting, the management structure can change (Brennan, 2010). However, not all members of the management who have been appointed have the interests of the shareholders at heart. Others aim at setting themselves at the helm of management with the aim of enriching themselves (PricewaterhouseCoopers, 2015).
Australian Shareholders‘ Association 2016, Our latest media release: ASA concerned re non-performance hurdles in remuneration structures. Retrieved 22nd Oct. 2016 from https://www.australianshareholders.com.au/news/our-latest-media-release-asa-concerned-re-non-performance-hurdles-remuneration-structures
Australian Shareholders’Association Limited 2016a, ASA questions increasing use of qualitative hurdles in executive remuneration structures. Retrieved 22nd Oct. 2016 from https://www.australianshareholders.com.au/sites/default/files/media-releases/asa_questions_increasing_use_of_qualitative_hurdles_in_executive_rem_reports_26_sept_2016.pdf
Australian Shareholders’Association Limited 2016b, Is it time for metcash chairman rob murray to resign? Retrieved 22nd Oct. 2016 from https://www.australianshareholders.com.au/sites/default/files/media-releases/is_it_time_for_metcash_chairman_rob_murray_to_resign_13_july_2016.pdf
Brammer, S., Jackson, G and Matten, D 2011, ‘Corporate social responsibility and institutional theory: New perspectives on private governance’, Socio-Economic Review, vol. 10, no. 1, pp. 3–28.
Brennan, D 2010, corporate social responsibility: The corporate governance of the 21st century. Edited by Ramon Mullerat. 2nd edn. Netherlands: Kluwer Law International.
Business Council of Australia 2004, Executive Remuneration. Retrieved 22nd Oct. 2016 from http://www.bca.com.au/docs/729E26F2-B737-48C0-8404-09475003F0F6/executive_remuneration_position_paper_final_24-6-2004.pdf
Kimbro, M.B and Xu, D 2016, ‘Shareholders have a say in executive compensation: Evidence from say-on-pay in the United States’, Journal of Accounting and Public Policy, vol. 35, no. 1, pp. 19–42.
McGuire, N 2012, Executive remuneration reform in the UK - publications - be informed. Retrieved 22nd Oct. 2016 from http://www.minterellison.com/publications/executive-remuneration-reform-in-the-uk/
Monem, R. and Ng, C 2013, ‘Australia’s “two-strike” rule and the pay-performance link: Are shareholders judicious?’ Journal of Contemporary Accounting & Economics, vol. 9, no. 2, pp. 237–254.
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PricewaterhouseCoopers 2015, Are companies finding it more difficult to get a yes vote? Retrieved 22nd Oct. 2016 from https://www.pwc.com.au/consulting/assets/publications/ten-minutes-agm-season-feb16.pdf
Schlueter, J 2007, ‘Beyond reform: Agency “after theory’, Feminist Theory, vol. 8, no. 3, pp. 315–332.