1.2.7
Shareholders
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Shareholders
A shareholder is an individual who holds shares in a business.
Public Limited Companies
- In a public limited company, any member of the public can buy shares through the Stock Exchange.
- Shareholders usually provide a public limited company with finance, though they are not routinely involved in the running of the business as this is controlled by a board of directors.
Private Limited Companies
- In a private limited company, shares can only be bought by the friends and family of the original owner. Shareholders usually provide a private limited company with finance, and they are usually involved in the running of the business.
Meetings
- Shareholders have a right to attend a business' Annual General Meeting (AGM) which is where votes can be made on key decisions affecting the business, including appointing a Board of Directors.
- The number of shares held is used to calculate a shareholder’s power so that each shareholder has a vote relative to the number of shares they hold.
- For example, Airbus is seeking to appoint a new Executive Director and is currently waiting for an AGM where shareholders can vote on this appointment.
Factors influencing shareholders
- Shareholders may decide to invest in a business for different reasons:
- Shareholders may decide to purchase shares if they think that the share price may increase in future years, as this will create a return for the shareholder.
- Shareholders may decide to purchase shares as they would like to receive an annual dividend.
- Shareholders may decide to purchase shares if they agree with a company’s aims and values and wish to be part of the company’s future journey.
Factors influencing the value of shares
- Business performance affects demand for its shares and greater performance will increase demand, which increases the share price.
- Economic performance affects demand for shares as economic growth gives individuals confidence in the market which may increase the demand for shares which increases the share price.
- News articles may affect demand for shares as businesses accused of being involved in scandals may receive a bad reputation which decreases demand for shares, therefore, decreasing share price.
Impact of changing the value of shares
- Decreasing and increasing share prices can have a significant effect on a business.
- Decreasing share prices may mean future investors are concerned about the business and this will make it more difficult for the company to raise additional finance through the sale of shares.
1What is Business?
1.1Understanding the Nature of Business
1.2Understanding Different Business Forms
1.3External Environments
2Managers, Leadership & Decision Making
2.1Understanding Management
2.2Understanding Management Decision Making
2.3Understanding Stakeholders
3Decision Making to Improve Marketing Performance
3.1Decision Making to Improve Marketing Performance
3.2Understanding Markets & Customers
3.3Market Segmentation, Targeting & Positioning
3.4Marketing Mix
3.4.1Marketing Mix3.4.2Product Decisions3.4.3Pricing Decisions & Price Skimming3.4.4Pricing Decisions & Price Penetration3.4.5A-A* (AO3/4) - Pricing & Competition3.4.6Promotional Decisions3.4.7Promotional Decisions 23.4.8Promotional Decisions 33.4.9Distribution Decisions3.4.10Distribution Decisions 23.4.11Digital Marketing3.4.12Evaluating Digital Marketing3.4.13A-A* (AO3/4) - The Marketing Mix & Promotion
4Decision Making to Improve Operational Performance
4.1Setting Operational Objectives
4.2Analysing Operational Performance
4.3Increasing Efficiency & Productivity
4.4Improving Quality
4.5Managing Inventory & Supply Chains
5Decision Making to Improve Financial Performance
5.1Financial Objectives
5.2Analysing Financial Performance
5.3Sources of Finance
5.4Improving Cash Flow & Profit
6Improving Human Resource Performance
6.1Human Resource Objectives
6.2Analysing Human Resource Performance
6.3Improving Organisational Design
6.4Improving Motivation & Engagement
6.5Improving Employer-Employee Relations
7Analysing the Strategic Position of a Business
7.1Mission, Corporate Objectives, Strategy
7.2Financial Ratio Analysis
7.3Overall Performance
7.4Political & Legal Change
7.5Economic Change
7.6Social & Technological Environment
7.7Competitive Environment
7.8Investment Appraisal
8Choosing Strategic Direction
8.1Choosing Areas of Competition
8.2Choosing How to Compete
9How to Pursue Strategies
9.1Change in Scale
9.2Assessing Innovation
9.3Assessing Internationalisation
9.4Digital Technology
10Managing Strategic Change
10.1Managing Change
10.2Managing Organisational Culture
10.3Managing Strategic Implementation
10.4Problems with Strategy
Jump to other topics
1What is Business?
1.1Understanding the Nature of Business
1.2Understanding Different Business Forms
1.3External Environments
2Managers, Leadership & Decision Making
2.1Understanding Management
2.2Understanding Management Decision Making
2.3Understanding Stakeholders
3Decision Making to Improve Marketing Performance
3.1Decision Making to Improve Marketing Performance
3.2Understanding Markets & Customers
3.3Market Segmentation, Targeting & Positioning
3.4Marketing Mix
3.4.1Marketing Mix3.4.2Product Decisions3.4.3Pricing Decisions & Price Skimming3.4.4Pricing Decisions & Price Penetration3.4.5A-A* (AO3/4) - Pricing & Competition3.4.6Promotional Decisions3.4.7Promotional Decisions 23.4.8Promotional Decisions 33.4.9Distribution Decisions3.4.10Distribution Decisions 23.4.11Digital Marketing3.4.12Evaluating Digital Marketing3.4.13A-A* (AO3/4) - The Marketing Mix & Promotion
4Decision Making to Improve Operational Performance
4.1Setting Operational Objectives
4.2Analysing Operational Performance
4.3Increasing Efficiency & Productivity
4.4Improving Quality
4.5Managing Inventory & Supply Chains
5Decision Making to Improve Financial Performance
5.1Financial Objectives
5.2Analysing Financial Performance
5.3Sources of Finance
5.4Improving Cash Flow & Profit
6Improving Human Resource Performance
6.1Human Resource Objectives
6.2Analysing Human Resource Performance
6.3Improving Organisational Design
6.4Improving Motivation & Engagement
6.5Improving Employer-Employee Relations
7Analysing the Strategic Position of a Business
7.1Mission, Corporate Objectives, Strategy
7.2Financial Ratio Analysis
7.3Overall Performance
7.4Political & Legal Change
7.5Economic Change
7.6Social & Technological Environment
7.7Competitive Environment
7.8Investment Appraisal
8Choosing Strategic Direction
8.1Choosing Areas of Competition
8.2Choosing How to Compete
9How to Pursue Strategies
9.1Change in Scale
9.2Assessing Innovation
9.3Assessing Internationalisation
9.4Digital Technology
10Managing Strategic Change
10.1Managing Change
10.2Managing Organisational Culture
10.3Managing Strategic Implementation
10.4Problems with Strategy
Practice questions on Shareholders
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- 1Reasons a shareholder may invest in a company:Fill in the list
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