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Shareholders are owners by virtue of having a seat at the board table and controlling the C-Suite. Bond holders and pension employees don't have a seat to cont

Shareholders are owners by virtue of having a seat at the board table and controlling the C-Suite. Bond holders and pension employees don't have a seat to control power. This, shareholders are true owners of the company. But laws prevent them taking other stakeholders for a ride.

throw0101a 2y ago
> Shareholders are owners by virtue of having a seat at the board table and controlling the C-Suite. […] This, shareholders are true owners of the company. But laws prevent them taking other stakeholders for a ride. There are laws and legal precedents in multiple countries that state the shareholders are not owners: * https://edwardslaw.ca/blog/shareholders-agreements-in-canada-corporate-law/ https://edwardslaw.ca/blog/shareholders-agreements-in-canada... * https://www.ippr.org/articles/who-owns-a-company https://www.ippr.org/articles/who-owns-a-company * https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/abs/who-are-the-owners-of-the-firm-shareholders-employees-or-no-one/587374B0969C7F1A3566F70D97732399 https://www.cambridge.org/core/journals/journal-of-instituti... Further, directors and such have a fiduciary to the corporation and not to the shareholders: > This separation of ownership and control provides the basis for many of the fundamental principles of corporate law. One example is the principle that the directors and officers of a corporation owe a fiduciary duty to the corporation: see Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592. * https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/699/index.do https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/699/ind... And that stakeholders must be considered as well: > Under the CBCA, directors have a fiduciary duty to act honestly, in good faith and in the corporation’s best interest. 2 Until a few decades ago, the corporation’s shareholders were often considered its primary beneficiaries. This shareholder-centric form of corporate governance was known as the shareholder primacy model, a model that would, theoretically, obviate managerial self-dealings. 3 > However, at the end of the last century a shift to include non-shareholder interests began to emerge. Many attribute this shift to the hostile takeover wave of the 1980s, which increased shareholder wealth efficiently but left employees scrambling for work and government institutions struggling to respond.4 The shareholder primacy model came under further scrutiny, in both Canada and the US, after the burst of the tech bubble in 2002 and the 2008 financial crisis.5 * https://www.nortonrosefulbright.com/en-ca/knowledge/publications/a979357b/stakeholders-primacy-paradigm-shift-confirmed https://www.nortonrosefulbright.com/en-ca/knowledge/publicat... The primacy of shareholders started to become in vogue in the 1970s, and so (because of recency bias) is what is best known now, but there is a history of other philosophies before that: * https://scholarship.law.cornell.edu/facpub/865/ https://scholarship.law.cornell.edu/facpub/865/ And the primacy of shareholders, being thought of as the most important stakeholder, did not change the legal precedents.

throw0101a 2y ago

> Shareholders are owners by virtue of having a seat at the board table and controlling the C-Suite. […] This, shareholders are true owners of the company. But laws prevent them taking other stakeholders for a ride. There are laws and legal precedents in multiple countries that state the shareholders are not owners: * https://edwardslaw.ca/blog/shareholders-agreements-in-canada-corporate-law/ https://edwardslaw.ca/blog/shareholders-agreements-in-canada... * https://www.ippr.org/articles/who-owns-a-company https://www.ippr.org/articles/who-owns-a-company * https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/abs/who-are-the-owners-of-the-firm-shareholders-employees-or-no-one/587374B0969C7F1A3566F70D97732399 https://www.cambridge.org/core/journals/journal-of-instituti... Further, directors and such have a fiduciary to the corporation and not to the shareholders: > This separation of ownership and control provides the basis for many of the fundamental principles of corporate law. One example is the principle that the directors and officers of a corporation owe a fiduciary duty to the corporation: see Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592. * https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/699/index.do https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/699/ind... And that stakeholders must be considered as well: > Under the CBCA, directors have a fiduciary duty to act honestly, in good faith and in the corporation’s best interest. 2 Until a few decades ago, the corporation’s shareholders were often considered its primary beneficiaries. This shareholder-centric form of corporate governance was known as the shareholder primacy model, a model that would, theoretically, obviate managerial self-dealings. 3 > However, at the end of the last century a shift to include non-shareholder interests began to emerge. Many attribute this shift to the hostile takeover wave of the 1980s, which increased shareholder wealth efficiently but left employees scrambling for work and government institutions struggling to respond.4 The shareholder primacy model came under further scrutiny, in both Canada and the US, after the burst of the tech bubble in 2002 and the 2008 financial crisis.5 * https://www.nortonrosefulbright.com/en-ca/knowledge/publications/a979357b/stakeholders-primacy-paradigm-shift-confirmed https://www.nortonrosefulbright.com/en-ca/knowledge/publicat... The primacy of shareholders started to become in vogue in the 1970s, and so (because of recency bias) is what is best known now, but there is a history of other philosophies before that: * https://scholarship.law.cornell.edu/facpub/865/ https://scholarship.law.cornell.edu/facpub/865/ And the primacy of shareholders, being thought of as the most important stakeholder, did not change the legal precedents.