Active Shareholders and CSR Policies for Corporate Sustainability

Assessment 3 online exam

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Question 12......................................................................................................................................3
Active Shareholders from Corporate point of view.....................................................................3
Question 13......................................................................................................................................4
Need for corporations to abide by and implement the CSR policies to evidence sustainability. 4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................1

INTRODUCTION
MAIN BODY
Question 12
Active Shareholders from Corporate point of view
The control that comes from the delegation of ownership responsibilities has been an area
of constant debate as they hold a position where they are empowered to spend the money
invested by the people in the company. The outcome of this is some think that the process is
necessary for the smooth functioning of the organization while the others consider it
unnecessary, keeping the view in mind of money being spend in the activities that fits best to
their interest. The theory of shareholder activism supports the value that active shareholders keep
a check on the actions of the managers. In accordance to Uysal, Yang and Taylor (2018) active
shareholders also balance the behaviour of the managers. The two aspects supported by the
theory are considered essential from the corporate perspective as it efficiently and effectively
optimises the system of the entire corporation. Following the shareholder primacy that says
interests of the shareholders are the core for the corporation. As the interest of shareholders are
to get maximum returns and the interest for which a corporation runs is to earn maximum profits.
The control by the shareholders always tend towards encouragement to the financing activities as
it helps them in better retaining of their control over the company and also reviews the directorial
activities and mismanagement gets disciplined. The claim of the shareholders over the voting
rights includes managerial control rights along with the rights over the supply for gaps in
contracts. The agency theory clearly explains that the shareholders holding the rights make them
check whether the managers are working as per the interests that favours the shareholders. In the
views of Shingade and Rastogi (2019) theory also defends the point that shareholders are the only
owners exclusively in the organization by the fact that the financial risks are backed by the
investments made by them. As the shareholders spend their money it is fair action to give them
the claim over the rights for controlling the managerial actions. Further the minority shareholder
also benefits from the control of shareholders. So in conclusion as per the activism theory for