Quizzes & Puzzles4 mins ago
Shareholder Power
6 Answers
Can anyone think of a real case of where the power of the shareholders has noticably impacted upon a company's behaviour?
I want to include a case study in an essay I'm doing, but can't think of one off the top of my head, and google isn't helping much at the moment. The more well known the organisation the better really. Would be great if I can get an example where a company has had to change its strategy, or responded in some way, as a result of the power of its shareholders.
I'm lacking brain power at the moment....any ideas would be very helpful indeed! Thanks very much.
I want to include a case study in an essay I'm doing, but can't think of one off the top of my head, and google isn't helping much at the moment. The more well known the organisation the better really. Would be great if I can get an example where a company has had to change its strategy, or responded in some way, as a result of the power of its shareholders.
I'm lacking brain power at the moment....any ideas would be very helpful indeed! Thanks very much.
Answers
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Have a look at the PIRC website (I think there is one) and look for examples of voting on governance issues. The ABI might be a good place to look, too, as they often advise institutions on how to vote on contentioous issues like executive remuneration/compensation - pay to the rest of us.
You'd do well to remember that the small shareholder has almost no power, and even if ALL the small shareholders voted together, they'd easily be outvoted by the institutional shareholders.
Remember, too, that it is only quite recently that the institutional shareholders have put their heads above the parapet - for years they had a 'quiet word' behind the scenes rather than vote against publicly and we, the public or the small shareholders, never knew anything about it.
You'd do well to remember that the small shareholder has almost no power, and even if ALL the small shareholders voted together, they'd easily be outvoted by the institutional shareholders.
Remember, too, that it is only quite recently that the institutional shareholders have put their heads above the parapet - for years they had a 'quiet word' behind the scenes rather than vote against publicly and we, the public or the small shareholders, never knew anything about it.
Big institutional investors are starting to take this seriously now. Here's a good example with quite a lot of reading
http://www.fandc.com/new/Institutional/Default .aspx?id=80513
http://www.fandc.com/new/Institutional/Default .aspx?id=80513
CIS (Co-op Insurance) is an example of a company that uses shareholding votes to influence businesses.
http://www.co-operativebank.co.uk/servlet/Sate llite?cid=1124867052292&pagename=CFSSustain%2F Page%2FtplCFSPageStandard&c=Page#engagementcis
http://www.co-operativebank.co.uk/servlet/Sate llite?cid=1124867052292&pagename=CFSSustain%2F Page%2FtplCFSPageStandard&c=Page#engagementcis
Northern Rock is a crap example so RevFunk is unfortunately wrong. And I'm being direct because of his 'lazy' comment.
Its a crap example because the majority of people who extracted their money (and hence drove their liquidity problem) were not shareholders - they were investors. Northern Rock is a bank, not a mutual (building) society any more.
About 6 years ago M&S went through a difficult time. At a well-remembered shareholders' meeting a lady shareholder got up at the meeting, waved a pair of skimpy ladies briefs in the air and declared that she could no longer find any underwear to suit her anymore. This was but one incident that paved the way to remove the former management team, prior to the arrival of Stuart Rose who has turned things around.
Its a crap example because the majority of people who extracted their money (and hence drove their liquidity problem) were not shareholders - they were investors. Northern Rock is a bank, not a mutual (building) society any more.
About 6 years ago M&S went through a difficult time. At a well-remembered shareholders' meeting a lady shareholder got up at the meeting, waved a pair of skimpy ladies briefs in the air and declared that she could no longer find any underwear to suit her anymore. This was but one incident that paved the way to remove the former management team, prior to the arrival of Stuart Rose who has turned things around.
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