Shareowners and those who manage shares for others need to know their rights in order to make appropriate and informed decisions on investments. This requires adequate insight on the issues affecting their investments and legal frameworks of the markets they wish to invest in (Aquila, The Shareholder Rights and Activism Review - Edition 3, 2018) .
Shareholder’s meetings provide shareowners with chances to provide their views about governance, stewardship and the direction their companies be headed. They should also be provided notices on when future meetings will be held together with new issues under consideration so that they can consider their responses and votes. Shareholder’s meeting has authority over the following matters; approval of the company’s annual accounts, election and dismissal of company directors, discharge of liability from the directors, bringing derivative suits against directors, increase or decrease of the company’s working capital, approval of any merger or split. Shareowners should also be provided with proxy statements, which play an important role in informing them on the effects of their continued investment in the company. It should include information on compensation, management, corporate governance changes and more insight that may be of interest to shareholders. A proxy allows shareholders to select someone else to vote in their place. Companies should also incorporate procedures that allow shareholders to vote even when in absentia from meetings (Aquila, Adopting a Poison Pill in Response to Shareholder Activism, 2016) .
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Shareholder voting should also be an integral part of rights that shareowners enjoy. These rights allow shareowners to table their opinions on board nominees and other proxy initiatives. It also helps them to decide on corporate actions that may influence the value of their interests. Each share has an equal fraction of the company’s registered capital, one vote and a proportional interest in the profits gained (Wen, 2013) .
The board of directors of a company set the strategic direction, ethics to be followed and the overall governance for their firms. Shareholders have the responsibility or recruitment and nomination of board members who will represent their interests appropriately. Companies should make this process fair and transparent. Shareowners also have the power to hold board members accountable for any bad decisions (Aquila, The Shareholder Rights and Activism Review - Edition 3, 2018) .
Shareholder activism continues to hold a major role in the US corporate pool. Companies should increase their resources to shareholder engagement to enable better governance in their companies.
References
Aquila, F. (2016). Adopting a Poison Pill in Response to Shareholder Activism. Practical Law The Journal , 22.
Aquila, F. (2018). The Shareholder Rights and Activism Review - Edition 3. The Law Reviews , 2.
Wen, S. (2013). Shareholder Primacy and Corporate Governance: Legal Aspects, Practices and Future Directions. Abingdon: Routledge.
