Abstract
This paper explores the influence of shareholders in the operations of contemporary companies. Special focus is directed to how shareholders use their leadership skills to impact on corporate social responsibility that has become vital in the twenty first century. Shareholders are key decision makers especially if they are the majority shareholders. In that regard, they impact on the actions of other stakeholders especially the top management, other shareholders, and the board of the company. However, some majority shareholders may misuse the rights provided by corporate legal system by mistreating the minority shareholders. In such cases, the majority shareholders will influence the organization negatively. For this reason, there is the need for a balanced legal system that regulates corporate behavior.
Background of the Research
A shareholder is a part-owner of a corporation who gains his interest by contributing capital towards purchasing of a company’s shares or even its formation. Shareholders can be individuals or different companies, since these are free lawful elements. The responsibility for corporation qualifies the shareholder for explicit rights. In any case, the privileges of a shareholder might be dependent upon the extent of ownership with the end goal that the individual who possesses most of shares can have more power than the minority shareholders. Shareholders likewise have responsibilities that emerge from their responsibility for corporation.
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The primary responsibility of shareholders is to pass resolutions at regular meetings by casting a vote in their shareholder capacity. This obligation is especially significant as it permits the shareholders to practice their definitive authority over the company and how it is managed. Shareholders can cast a vote by portrayal of approval or through a ballot where each vote will be proportionate to the quantity of shares held by each shareholder (Abeysekera & Fernando, 2018) . A demonstration of approval is normally the favored technique for casting a vote that happens at an all-inclusive meetings.
Common shareholders are those that possess a company's normal stock. They are the more predominant kind of stockholders and they reserve the privilege to decide on issues concerning the company. As they have command over how the company is managed, they reserve the privilege to record a legal claim against the company for any bad behavior that can possibly harm the organization (Daft & Benson, 2016) . Preferred shareholders are rarer in most organizations since they try to decentralize power at all costs. Unlike common shareholders, they claim a share of the company's preferred stock and have no democratic rights or any state in the manner the company is managed. Rather, they are qualified for a fixed measure of yearly profit, which they will get before the normal shareholders are paid their part. Despite the fact that both preferred stock and common stock see their worth increase with the positive execution of the company, the previous encounters higher capital additions or misfortunes.
Significance of the Research
The influence of shareholders has been regulated in past two decades, but they can still use tricks to beat the legal system and have too much control over other stakeholders. Prior to the rise of the publicly traded corporation, the families that established these companies were the managers, members of board of directors, and shareholders. But since these companies expected to raise expanding measures of funding to extend, they in the end needed to seek external investors. Subsequently, external parties immediately became managers and members of the board. Subsequent to offering shares to the public, establishing relatives held control of their corporations as a rule (Hersey et al., 2017) . However, shares likewise were distributed among a range of investors who had little possessions. This structure remained in place until the second half of the twentieth century when organizations, such as banks and insurance companies started to collect a lot of stocks in explicit companies and turned into the major shareholders especially in the United States.
Shareholders have a responsibility to provide the best possible management of the company. They have an obligation to call the hierarchical management and board of directors to represent the exhibition of the company. Moreover, shareholders may pose inquiries, look for explanations and even provide criticisms regarding the activities and decisions of the management. Shareholders typically address management during the annual general meetings. However, they can convene uncommon and extraordinary meetings to examine explicit motivation identifying with the management of the company.
The management of a corporation ensures that appropriate records are kept up so that shareholders can assess them to get an exact image of the situation of the business. Shareholders reserve a privilege to be given examined budget reports during the annual comprehensive meetings. These announcements are from that point documented with the company's library, where they can be promptly gotten to. Corporations additionally get ready annual reports that spread each part of the business to give the shareholders far-reaching data that they can use to settle on decisions regarding the eventual fate of the company.
It is the responsibility of the shareholders to choose corporation officials to help in the running of the business. In that regard, shareholders can choose directors during annual general meetings. These directors comprise a board that is accused of the responsibility for the general management of the company. The shareholders additionally designate external inspectors who analyze the corporation's books of records and convey examined proclamations toward the end of each fiscal year. However, a shareholder's obligation is limited as the company's duties are simply the responsibility of the company (Zhang & Chen, 2013) . From that perspective, the shareholder is subject just at the cost they paid for the shares. On the other hand, it should be noted that if the shares are regularly paid, the shareholder will be required to pay the rest of the equalization. The payment can be done either when the directors or an overseer call up the unpaid sum.
In privately owned companies, the actions of any individual shareholder will have greater effect on how the company does business. These companies are smaller and shareholders may get engaged with everyday tasks of the business. In such cases, shareholders frequently work directly for the company and have contracts set up to secure them. Normally, a shareholder in a privately-owned company may have a shareholder understanding arrangement directing their particular responsibilities and might be limited in terms of when and how they can sell their shares. He additionally has a trustee obligation to different shareholders to act in the company' eventual benefits. The trustee commitments a shareholder of an intently held company are a lot more noteworthy than commitments of shareholders of a public-exchanged business.
Problem Statement
Any public limited or private limited company has shareholders who contribute capital towards the setting fully operational of the company. While on account of private limited companies, the shareholders are typically the advertisers a couple of friends or family. In such cases, the public limited companies have a huge collection of shareholders drawn from varying backgrounds. The shareholders of any company have a responsibility to guarantee that the company is well managed and run in an all-round manner. They do this by checking the presentation of the company and stating their criticisms or giving their endorsement to the activities of the management of the company. Minority shareholders have the alternative of communicating either their dissatisfaction or understanding at the annual general meetings of the companies.
The idea of having shareholders for the companies is to make the companies responsible for their activities. As referenced over, the shareholders are generally represented on the board of directors and the board of directors goes about as the overseer for shareholder interests. In situations where the board is not agreeing to the solicitations of the shareholders, the shareholders can act directly. This can be done by requesting that the management to gather an all-inclusive meeting with the goal that they can voice their assessments. As of late, many companies have been confronting the warmth from the shareholders in light of its enormous money holds. The cases are common where the shareholders have requested that the company buyback a portion of the shares to make up for the declining profits and falling stock costs.
Shareholders are qualified for vote on a variety of issues, despite the fact that the particular territories where shareholders have a state are controlled by state laws and corporate local laws. By and large, shareholders reserve the option to name a corporate president, elect individuals to a board of directors, and decision on noteworthy changes in a corporation. These huge changes may remember changes for the line of business, change of company name, and company divestments, acquisitions, and mergers. Boards of directors follow up for the benefit of the share-holders and make decisions by selecting corporate officials and checking on corporate arrangements, accounts, and procedures. This proposal seeks to solve these issues through a research that will investing all aspects of shareholders and their position an organization.
Objectives of the Research
The research is aimed at exploring how shareholders influence the operations of the company. For example, shareholder activism is common activity in modern companies where they can push the board and the management to make decisions that are in accordance with natural, social and ethical standards. This is reflected in the manner in which some global companies had to drop some disputable tasks since their shareholders questioned this on considerate grounds. The point here is that left to themselves, the managements of companies may act in manners that would improve their own advantage to the disadvantage of the company. In these cases, the shareholders play a pivotal role in intervening between the organizational issues and irreconcilable circumstances together with irregularities of information (Abeysekera & Fernando, 2018) . Furthermore, shareholders have a responsibility towards society since the companies that they have invested in cannot be permitted to compromise social and ethical standards. Thus, the responsibilities of shareholders are many and varied. Shareholders are increasingly requesting a more prominent state in the leadership of the companies where they have invested and this is a good sign that they are leading the companies towards the right direction.
Another objective of the research is to explore whether shareholders can influence democracies in organizations through leadership and guidance. Shareholders basically influence a company through their democratic rights in company choices (Yaghi, 2019) . Usually, shareholders for the most part have power equivalent to the level of shares they claim. For instance, an investor with 30% of the shares of a company has 30% power to cast a vote for settling on significant decisions. Here, is where the question of equality that is associated with democracy comes on. The management frequently will set up major business changes to a vote by the shareholders. The board of directors likewise is decided on by shareholders in relation to the company ownership. Due to differences in power, shareholders sometimes have irreconcilable circumstances with other shareholders or the company itself.
Research Questions
To what extent do shareholders influence the operations of a company?
How do shareholders influence an organization’s corporate social responsibility?
How do majority shareholders take advantage of their powers to mistreat minority shareholders?
What legal changes are requires to regulate the powers of majority shareholders in a company?
PRELIMINARY LITERATURE REVIEW
State laws explicitly illuminate various rights that shareholders have paying little heed to the size of the corporation. The rights of these shareholders include the option to join in and vote at annual shareholder meetings either themselves or through representatives. The rights additionally incorporate the capacity to survey data about the company. For example, Mimbi & Lutz (2011) indicate that they have the right to inspect the books and records of the company, alongside a list of all shareholders. At long last, these rights also include the option to decide in favor of major corporate occasions. For example, they vote for or against matters concerning corporate directors, mergers, disintegration, deals and changes. The shareholders are given these rights since they are major stakeholders that can influence the organizational positively.
Abeysekera & Fernando (2018) found that shareholder activism is commonly utilized if all else fails. In such cases, the organizations frequently look to show how the interests of workers and shareholders are adjusted for the purposes of garnering support from a more extensive shareholder base. While no organization creates shareholder goals without convening an annual general meeting up until now, modern researchers find that activism has at times applied significant effect on companies. The process happens by facilitating a conversations among boards and associations, and by making issues known to different shareholders, media and the general public. Like in the past studies, Nakamura (2013) finds that organizations are deliberately utilizing the arrangement in worker and shareholder interests. Moreover, the investigation focuses to administrative and corporate endeavors to restrict corporate social responsibility by compromising shareholder activism.
Daft & Benson (2016) explain that s ince shareholders choose a corporation's directors, they can apply a lot of impact on a company and its strategies. This is possible in light of the fact that directors realize that they may be fired if shareholders are not happy with their choices. In any case, shareholders generally have been intrigued by investment and thus they have not played a significant role in company activities or administration, which they have left to the management and the boards. In any case, experienced investors have now and again purchased stocks to hold onto control of companies. One system shareholders have used to connect top management and shareholder objectives has been giving corporate officials stock alternatives. This way, they allow them to buy stocks eventually at a pre-determined cost. According to Eding & Scholtens (2017) these alternatives can give a generous benefit opportunities to their holders i f the stock value rises after some time. In this manner, if stock costs rise, both top managers and shareholders gain and their preferences are adjusted significantly.
Obstruction of shares and stocks trading should be debilitated since it clashes with the majority rule hypothesis of the corporation. It gives a picture of how these exercises have developed after some time. Hersey et al. (2017) find that the fundamental commitment of organization financial activism throughout the past two decades has not basically been sorted out regardless of whether some critical triumphs have been accomplished. Or maybe it has been to the general investor network, since endeavors by shareholders activists have made it legitimately and authoritatively simpler. These efforts are intended to effectively advance proposition to force changes in corporate conduct and to restrict management recommendations.
Companies actualize corporate social responsibility by expanding productivity using methodologies such as invert technique. This way, they can determine the point at which to affirm the dedication of individuals working in it. Some companies uses "external risk" methodology, intended to upgrade popularity of the organization. Other companies use a "coordinated open system process" which groups together their actions to advance the accepted procedures, learning, and positive social factors all through the business chain ( Hersey, Blanchard & Johnson, 2017) . Likewise, the indirect effect of social responsibility on the company's action results is stressed through the organization popularity and consumer loyalty.
Though numerous investigations focus on shareholder recommendations as far as issues and casting a vote results, this does not generally reveal anything as far as the significant changes in corporate behavior. Many researches do anyway with the subject of shareholder recommendations but they acknowledge that there are different types of shareholder activism. There is by all accounts difference about whether shareholder activism is a successful tool for change or not, with the larger part anyway inclining towards a cautious position. In that regard, a corporations' key reaction to shareholder activism, and the likelihood for an effective shareholder crusade, can be comprehended through various factors ( Eding & Scholtens, 2017) . These factors include shareholders' impact and force and the corporate culture and how much the shareholder demand is in accordance with it. Others resolve to analyzing, the world of politics where the shareholder battling happens.
The global business setting has seen a retreat from a restrictive spotlight on shareholder riches boost. Many financial analysts and scholastics have upheld the advantages of the stakeholder hypothesis especially in a worldwide commercial center. The global commercial center long term key planning is more significant than present moment stock advertise value developments. Some companies are currently not willing to test whether benefits of the organizations are shared among all stakeholders. This is because the investigation of corporate administration has been a predisposition towards taking a look at shareholder interest for disadvantage to stakeholder premium ( Pattit & Pattit, 2018) . Notwithstanding, interest of the stakeholder government has expanded as of late.
The rights fundamental to all shareholders can be helpful in a local corporation circumstance. However, additional rights are expected to shield minority shareholders from being persecuted by the majority shareholders. Accordingly, the legal framework has conceived rules to protect the minority. Shareholders have a few alternatives if they accept the board is not running the company well. In such cases they can vote, sell or sue. Shareholders find a good pace the board of out of this world on the ballot. However, this might be a limited solution for shareholders in large corporations in light of the fact that most shareholders do not claim enough shares for the shareholder's vote to have any kind of effect. Shareholders can likewise sell their shares to new purchasers ( Zhang & Chen, 2013) . At long last, shareholders can bring a suit against the board of directors if the board breaches its obligations to the company.
Shareholder understandings may likewise contain capital call arrangements, which clarify the obligation of shareholders to contribute extra capital should the organization need it for activities. Much the same as local laws, shareholder activities may address who can serve on the board of directors (Mimbi & Lutz, 2011) . In spite of the fact that regulations regularly contain information in regards to what number of shares an association can issue, they do not address originator's value. They also fail to value shares or what proprietors can and cannot do with their value.
From one perspective, in spite of the fact that the legal and administrative condition influences corporate administration, it is additionally the situation that legal standards and guidelines are the result of various corporate administration systems. For instance, legal systems with distributed possession may have a more grounded requirement for guidelines that ensure shareholder rights. For instance, as ownership structure in the United States has become increasingly distributed, the authoritative condition has adjusted to the specific needs emerging from distributed property (Pattit & Pattit, 2018) . On the other hand, many European nations are adjusting their administrative surroundings, specifically by reinforcing the minority shareholder assurance. This is due to the ill-treatment by controlling shareholders that can emerge in their systems of corporate management.
Rather than being allowed to oversee in a way that would profit most of the shareholders as in a huge corporate setting, firmly held corporations are required to work under guidelines that are more likened to an organization. Under most close corporation laws, the greater part shareholders owe a caretaker obligation to the minority shareholders. This implies majority shareholders must plan with minority shareholders with legitimacy, trustworthiness, and reasonableness (Zhang & Chen, 2013) . Courts have ordinarily held that majority shareholders breach these responsibilities when they structure companies to compete directly with the corporation, pay themselves significant compensations as well as profits and additionally sell stock of the company at ideal terms just to themselves.
Corporations have extraordinary rights for minority shareholders. By and large, majority shareholders are company organizers. In older companies, majority shareholders are much of the time relatives of a company organizers. In either case, by controlling the greater part of a company's democratic interest, majority shareholders use impressive capacity to impact key operational choices ( Daft & Benson, 2016). For example, they substitute board members, and C-level administrators like Chief Executive Officers (CEOs) and other senior employees.
Consequently, companies regularly attempt to abstain from having majority shareholders among their positions. Besides, in contrast to the proprietors of sole ownerships or organizations, corporate shareholders are not actually at risk for the company's obligations and other financial commitments. If a company gets wiped out, its lenders cannot focus on a shareholder's very own benefits. Shareholders are usually viewed as the proprietors of a corporation. In shareholding, the possession rights are to some degree limited contrasted with the ownership rights one has over a house or other kind of substantial property (Kreitner & Kinicki, 2010) . Notwithstanding deciding on management issues, these shareholder proposition are the principle route for shareholders to be heard by management and different shareholders. They also have their interests considered in an official setting.
Companies today are being called upon by their shareholders and different stakeholders to support the primary concern. They are also required to help address a part of the nation's most challenging issues, including those concerning financial advancement and the world. While conclusions contrast on how responsibility should be distributed over the public and private areas, corporate stakeholders are requesting that companies perceive a more extensive extent of responsibility in tending to those issues. Subsequently, companies are progressively working with stakeholders to comprehend their perspectives and challenges ( Hersey, Blanchard & Johnson, 2017) . These vary from ecological, social, corporate administration and financial issues and to incorporate and address those perspectives and worries in the company's vital dynamic procedures.
Among the different kinds of entertainers that are engaged with framing standards for corporate social responsibility, shareholders appreciate a one of a kind situation. This is because they are indeed proprietors. This possession awards shareholders the option to communicate their suppositions about corporate lead, which can be accomplished by casting a ballot in decisions for participation on the board of directors, the board itself, proposing and deciding on shareholder goals, and by meeting with corporations, for instance at street appears or in close to home meetings (Abeysekera & Fernando, 2018) . Corporations are responsible to their shareholders, and are reliant on them for access to capital. This infers a potential influence for shareholders to impact corporations.
Institutional business people structure foundations. Norm business visionaries, then again, are associated with initiating a standard move, and are not really basically focuses on establishments in that capacity. Verifiably, in any case, changes in standards can change organizations. While shareholders can at last add to the systematization of the idea of corporate social responsibility, they are all the more directly associated with changing standards for corporate conduct. For instance, shareholders may propel corporations to receive ecological management systems. Along these lines, set up a standard that such system is an unquestionable requirement need for corporations. In such manner, shareholders may constrain corporations to create yearly supportability reports with specific sorts of substance, subsequently, setting up detailing standards ( Hersey, Blanchard & Johnson, 2017) . Shareholders may likewise require their portfolio companies to actualize ethical codes of behaviors for their providers, in this way, changing standards for provider maker connections and responsibilities.
Stakeholder hypothesis incorporates moral contemplations in its underpinnings, which makes this way of thinking exceptionally significant for explore on the subject of corporate social responsibility. The general thought of corporate social responsibility is that corporations have responsibilities towards shareholders, yet to different constituents also, who are influenced by the activities of the firm. Experimental perceptions likewise bolster the possibility that the corporation, thusly, is influenced by its constituents. For instance, controllers who oblige natural and social responsibilities, clients and representatives whose support is important for the proceeded ( Mimbi & Lutz, 2011) . The exercises of the company and shareholders whose feelings are fundamental on how the corporation should be addressed gives that influence shareholder value.
Supporters of the shareholder value approach the situation by contending that if a company is under obligation to more than one interested party, at that point it will confront the issue of choosing the various parties. In the event that it must choose contending interests, the company must put together this choice with respect to some extra explanation at that point. However, companies are unable to figure out what the concluding standard ought to be if not expanding shareholder value. The stakeholder model offers no recommendations. Without a conclusive basis, a company would continually confront this sort of dilemma, which would radically hinder the dynamic procedure (Pattit & Pattit, 2018) .
Such a dilemma could show itself, for instance, as a suggestion that would increment shareholder worth and address client issues, yet would bring about the decreasing the workforce. However, a company does not disregard the interests of different stakeholders while focusing on shareholder value. For instance, employees will stop if their needs are not taken care of and clients will ridicule the opposition if their welfare is not considered important. Therefore, the management definitely should consider their needs. At long last, supporters of this methodology clash that in the event that a company neglects to be productive, at that point it should close, which would profit none of the stakeholders.
Methodology
The research will use two main methods to collect both qualitative and quantitative information. The first method of data collection will be questionnaires that will be sent to prospective participants through emails. Upon administering the questionnaires, the potential respondents will be issued with a consent for in which they may decide to participate in the research or choose to decline (Quinlan et al., 2019). The questionnaires will target 50 shareholders and managers from ten companies. Secondly, another method of data collection is interviews that will be scheduled two months before the actual date of interviews since most company shareholders have busy schedules. The interviews will target 10 shareholders from the ten companies selected earlier while collecting information through questionnaires. The interviews will seek to answer questions relating to effective leadership and organizational behavior and the influence of shareholders in operations of an organization.
Analysis of Results and Limitations
A qualitative analysis is important to analyze information regarding shareholders influence on their organizations. As far as quantitative data is concern, descriptive statistics will form a vital basis of evaluating the results (Quinlan et al., 2019). The likely limitations of this research will be lack of enough information since most shareholder always not will to provide comprehensive information regarding their organizations.
Contributions and Outlets
The outcome of this project will important in enabling current and future organizational shareholders to influence their organizations positively. The results will also be shared with other interested researchers so that they can conduct further research on the topic.
Citations/References and Exhibits
The research will use and reference secondary sources that include peer reviewed journals, books, magazines, online databases, and company websites.
Anticipated Challenges
In this research, the research expects to face the challenge of low response rates since most shareholders do not easily participate in researches that do not involve their companies directly. For this reason, there is need to sample a large group. Moreover, the researcher, will ensure that the potential participants are given comprehendible reasons for the research (Quinlan et al., 2019). The major explanation is that the research will be only be conducted for academic purposes and that the information gathered from the organizations will not be utilized for any other uses other than evaluation purposes.
References
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Daft, R., & Benson, A. (2016). Management . Cengage Learning EMEA.
Eding, E., & Scholtens, B. (2017). Corporate Social Responsibility and Shareholder Proposals. Corporate Social Responsibility and Environmental Management , 24 (6), 648-660. https://doi.org/10.1002/csr.1434
Hersey, P., Blanchard, K., & Johnson, D. (2017). Management of organizational behavior . Pearson India Education Services.
Kreitner, R., & Kinicki, A. (2010). Organizational behavior . McGraw-Hill/Irwin.
Mimbi, P., & Lutz, D. (2011). Shareholder value and the common good . LawAfrica Publishing (K) Ltd.
Nakamura, E. (2013), "The impact of shareholders' types on corporate social responsibility: evidence from Japanese firms", Journal of Global Responsibility , Vol. 4 No. 1, pp. 113-130. https://doi.org/10.1108/20412561311324104
Pattit, J., & Pattit, K. (2018). You Have Our Permission Not To Grow. Entrepreneur And Innovation Exchange , 9 . https://doi.org/10.17919/x9nm3q
Quinlan, C., Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2019 ). Business research methods . Andover: Cengage Learning.
Yaghi, M. (2019). Toxic Leadership and the Organizational Commitment of Senior-Level Corporate Executives. Journal Of Leadership, Accountability And Ethics , 16 (4). https://doi.org/10.33423/jlae.v16i4.2375
Zhang, Y., & Chen, C. (2013). Developmental leadership and organizational citizenship behavior: Mediating effects of self-determination, supervisor identification, and organizational identification. The Leadership Quarterly , 24 (4), 534-543. https://doi.org/10.1016/j.leaqua.2013.03.007
