RIGHTS AND PRIVILEGES OF STAKEHOLDERS
Stakeholders are people, groups, or organizations with an interest
in a business or its activities. They have a variety of rights and
privileges, including:
Access to information
Stakeholders have the right to receive accurate and timely
information about the company's operations. They can also
request additional information from management at any time.
Voting rights
Stakeholders can vote on significant company matters, such as
mergers and acquisitions, major investments, and board
appointments.
Share in company assets
In the event of liquidation, stakeholders have the right to a share
of the company's assets.
Participation in general meetings
Stakeholders can participate in general meetings, either in person
or through a proxy.
Election of board members
Stakeholders have the right to elect board members.
Dividends
Stakeholders are entitled to receive dividends in a timely manner
after they are approved in general meetings.
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Shareholders are a type of stakeholder, but not the only
type. Other stakeholders include employees, customers,
suppliers, governments, and the public.
TYPES OF STAKEHOLDERS
Primary stakeholders (also known as key stakeholders) have
the highest level of interest in the outcome of a company because
they are directly affected by the outcome. They actively
contribute to the company. These types of stakeholders include
customers and team leaders.
Secondary stakeholders also help to complete company
objectives, but on a lower, general level. These types of
stakeholders help with administrative processes, financial, and
legal matters.
Direct stakeholders are involved with the day-to-day activities
with a company. Employees can be considered direct
stakeholders as their daily tasks revolve around projects at a
business.
Indirect stakeholders pay attention to the finished project
outcome rather than the process of completing it. Indirect
stakeholders concern themselves with things like pricing,
packaging, and availability. Customers are a type of indirect
stakeholder.
Other stakeholders include:
. Suppliers
. Owners
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. Investors
. Creditors
. Communities
. Trade unions
. Employees
. Government agencies
. Customers
. Media
SHAREHOLDER PROTECTION
Shareholder protection is a way to ensure that a business continues to
operate in the event of a shareholder's death or other circumstances that
prevent them from working. It can also help to ensure that the beneficiaries
of a deceased shareholder receive the full value of their shares.
Here are some ways to protect shareholders:
Shareholder agreement
This agreement outlines the rights and responsibilities of shareholders,
including voting rights, conflicts of interest, and the sale of shares. It can
also help to prevent conflict between shareholders.
Company buyback
In this arrangement, the company buys back the shares of a deceased or
retiring shareholder. The company then cancels the shares, reducing its
authorized share capital. Minority shareholders may have limited automatic
rights and protections in law. A well-drafted shareholder agreement can be
an important way to protect their position.
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