Rights of Shareholders
What are the rights of traditional owners?
- Right to residual claimants
- Oversee the day to day operations
- Monitor the board
But since the shareholders get the residual claimants, could we consider them owners? Yes in a way. The shareholders never had the right to oversee the day to day operations. This power is given to the directors in the articles (it is not delegated from the shareholders to the board.)
Why are the incentives to give the voting rights to equity holders and not debt holders or workers in the corporations?
- Workers don't get a share of the profits; they get a salary
- The debt holders don't have an incentive to take anything riskier than anything that can pay back their interest rates (unless you get to the point where you are close to bankrupcy in which case the debt holders have an interest in picking)