Running head: What are shareholders for 1

What are shareholders for?

Author

Institution
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What are shareholders for?

1.

The shareholders represent for the companies a three dimension stakeholder for the

company. Money, information and discipline. The money is the first dimension of the

relation between the shareholders of the company. The shareholders give the money the

company needs to invest and grow. The shareholder besides gets the responsibility with the

company of responds against the liabilities of the company. The shareholder not only has

the right to enjoy the benefits and dividends of the company, in case the company gets

benefits in the year, but to provide money to the company to finance operations and

investments. The dimension of money of the shareholder is bidirectional.

The information dimension depends on the relation and communication between the

shareholders and the direction of the company; those are the Chairman and the Board of

Directors. The communication between the board and the shareholders guarantees that the

company will get good results. When the shareholders are not interested in the management

of the company and have a passive attitude against the management, the annual results of

the company won't be successful. The shareholders of a public company in United States or

another country with a developed stock market have available all the financial information

about the company and the market. Annual Reports, 10-K and 10-Q, are available to the

shareholders and must be given feedback to the Board of Directors.

The discipline of the shareholders is based on the continuous track of the company

performance. The complacency problem of many United States companies (Harvard

Business Review, 2012) affect the performance of the companies. The managers of the
Running head: What are shareholders for 3

company do not have the feedback from the shareholders whose have the duty to have a

close contact to the managers and administration of the company.

2.

I agree with the proposal of the author. The good performance of the company

depends in the first instance of the shareholders that must demand to the Board of Directors

and the Chairman. The demand to increase the value of the company as a whole with a

sustainable strategy that is friendly to the environment, community and the economy.
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Reference List

Fox, Justin & Lorsch, Jay W (2012). The Big Idea What good are are shareholders?

Harvard, UK: Harvard Business Review July August 2012.