Essays on Governance in a Globalising World Assignment

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The paper "Governance in a Globalising World" is a good example of a business assignment.   Shareholders are people who own shares of a company’ s stock. Their rights in the annual general meetings include the right to convene general meetings where they are allowed to call meetings that involve the board of directors and other shareholders in the company. They can attend the AGM, be given the chance to speak and they can also appoint a proxy. When voting is taking place they are also allowed to participate in the voting process since they are the owners of the company.

Before the meetings are held, these people must have information regarding financial statements which must be circulated to all fourteen days before the meeting is held. AGM’ s should be held every year and this gives shareholders the opportunity to collect information about the company and also to question the board of directors on affairs involving the running of the company. They can influence a company’ s activities or decisions by way of voting when there is a new agenda. When there is urgent business to be discussed, they can call for the extraordinary general meetings where they discuss business that is urgent and cannot wait for the next AGM (Gifford 2012, 83). Shareholders have a direct influence on a company because they have voting rights on major corporate decisions.

They vote on the elections of the company’ s board members. When a company wants to start a separate business unit, the shareholders are given the right to vote on the move. Those with large amounts of stock put across their concerns publicly in efforts to have an impact on the decisions that are made.

An example would be the case of Rob Murray, the chairman of Metcash who did not want to resign and it was thought that he should put himself up for re-election to let the shareholders decide if they would appoint him again on the board of directors. It is a good example of how shareholders influence the company from the top of the management chain (Welker 2011, 52). Concerns have also come up citing that the gap between the top and the bottom in terms of remuneration is becoming larger.

It is considered as economically and socially wrong to award themselves huge sums of money. Sometimes the compensation given does not collate with the performance of an organization. Question 2 In the United Kingdom, corporate governance is based on the market model where there is a lot of focus on the value of shareholders, highly dispersed ownership and one-tier boards. The shareholder's rights include the right to appoint directors and also re-elect them. Shares can be owned by anyone and not the government. They have strict codes of governance and they challenge the board members if these laws are not followed.

In regards to remuneration reports, the shareholders have a right to reject reports if there is lack of transparency of the total costs when there is inconsistency in performance, excessive payments during termination when there are excessive bonuses that are not liked to performance and also when there are ex gratia payments done which they did not approve (Van der Elst 2012, 39).

References

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Ferris, S.P., Jagannathan, M. and Pritchard, A.C., 2003. Too busy to mind the business? Monitoring by directors with multiple board appointments. The Journal of finance, 58(3), pp.1087-1111.

Gifford, J., 2012. Effective shareholder engagement: The factors that contribute to shareholder salience. In The next generation of responsible investing (pp. 83-106). Springer Netherlands.

Welker, M. and Wood, D., 2011. Shareholder activism and alienation. Current Anthropology, 52(S3).

Van den Berghe, L.A. and Levrau, A., 2004. Evaluating Boards of Directors: what constitutes a good corporate board?. Corporate Governance: an international review, 12(4), pp.461-478.

Fich, E.M. and Shivdasani, A., 2006. Are busy boards effective monitors?.The Journal of finance, 61(2), pp.689-724.

Hewitt, P., 2011. The Exercise of Shareholder Rights.

Van der Elst, C., 2012. Shareholder rights and shareholder activism: the role of the general meeting of shareholders. Annals Fac. L. Belgrade Int'l Ed., p.39.

Ayuso, S. and Argandoña, A., 2009. Responsible corporate governance: towards a stakeholder Board of Directors?.

Adams, R.B., Hermalin, B.E. and Weisbach, M.S., 2010. The role of boards of directors in corporate governance: A conceptual framework and survey.Journal of Economic Literature, 48(1), pp.58-107.

Farrar, J., 2008. Corporate governance: theories, principles and practice. Oxford University Press.

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