Shareholders who own more than $2,000 in shares for a year can file a resolution and vote on proposals. Shareholder activism can lead to corporate change, particularly in environmental issues, but may require media support. Shareholders should ensure they receive and complete their proxy ballots.
People who own corporate stock often have the right to propose shareholder resolutions. These resolutions can address various corporate practices, and social responsibility issues can be placed on a corporation’s proxy ballot for consideration at the annual meeting of shareholders. During the annual meeting, the shareholder proposes an item on the proxy ballot and is usually given time to discuss the proposal. Other shareholders have the opportunity to vote on this proposal. This particular shareholder privilege allows individual shareholders to engage in shareholder activism, forcing a corporation to look at its own practices and make changes to the way it does business.
The ability to engage in shareholder activism is restricted in part by a country’s laws that govern corporations. In the United States, as of 2010, any shareholder who owns more than $2,000 United States Dollars (USD) in shares of a company for one year or more may elect to file a shareholder resolution, and any shareholder who owns shares for more from two months to The time of the shareholders’ meeting can vote on these resolutions. In some cases, shareholder activism is a carefully coordinated campaign that includes both shareholder and media participation and public relations efforts by activist organizations. If corporate executives notice that a problem is attracting a significant amount of attention, the executives may decide to investigate the matter further. In some cases, this has led to meetings between executives and shareholder activists.
Shareholder activism has been particularly successful in areas involving environmental concerns, particularly given the considerable media attention on sustainability and environmental protection issues. For example, a major electronics retailer in the United States responded to shareholder activism by starting a very successful recycling program in many of its stores. Activist shareholders may find it more difficult to generate interest on their own without the support of media-savvy policy change organizations.
Individuals who wish to participate in shareholder activism should ensure that they receive and complete their shareholder proxy ballots each year. If the shareholder relies on a brokerage firm or financial adviser to manage his investments, he may never see his proxy slips because he may have inadvertently indicated that he does not want to receive materials from the companies in which he owns shares. This can be easily remedied by contacting the broker or financial adviser and requesting a change in preferences for receiving proxies and other information.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
