Should stockholders TRUST the grease execs(Corporations) to do the right item beside their off-colour gotten gain?
Answers:
The stockholders elect the grease execs for adjectives grease corporations.
NOTE ON YOUR Aftercomments: Realistically, and contained by reality, they do. In my state, and I am honourably indisputable adjectives others, a corporation is required to hold an annual shareholder prior arrangement to elect the Board of Directors and approve or disapprove of schedule taken by the Board of Directors.
The profits and losses are shared beside the shareholders, contained by the form of wealth gain and dividends. The primary concern of the shareholder is to product profits.
Since my grease company stocks enjoy net me journal stock assets gain and dividends, I own to answer, Yes, I trust the grease company execs, to do the right entry near the gain, which is ratify the profits on to the shareholders.
Each share is entitled to one vote surrounded by every corporation. So you are correct, the majority of shareholders do not other return with what they want. The majority of shares will achieve what they want. But they also hold the most to gain or lose. It is the means of access of adjectives corporations, not merely grease companies.
For example, if I own 90% of the shares, I get hold of 90% of the votes. Is in attendance some cause why you devise that ten folks who own individual 10% of the shares total should run my company?
If I single own 26% of the shares, and my wife owns 26%, and everyone else owns the other 48%, it won't thieve much to convince my wife to vote against me.
The Board of Directors, are usually not required to be shareholders however, and neither are the officer (President, Secretary, Treasurer, Vice-President(s).