Wednesday, November 12

Shareholder primacy: Is there a need for change?

 The Governance Institute of Australia has issued a discussion paper Shareholder primacy: Is there a need for change? that explores the means by which societal expectations in relation to moderating the influence of corporate activity on the community and environment can best be met. The paper queries whether the explicit objectives of a company should be solely about shareholders; whether the current law constrains a broader view of the best interests of the company; whether a wider view in law is required; and whether greater certainty is required as to the operation of the law in regard to shareholder primacy... Read more… 


susan said...

I think this matter depends a lot on who are the shareholders. If there were allowances made for workers to be shareholders in the relevant companies then primacy of their interest would benefit them as well as the larger community.

Lindsay Byrnes said...

Hi Susan
Apart from compulsory super, which means virtually all workers in Australia via their super balance have investments in shares, there is also a growing number of individual investors.

Reports show Australia continues to have one of the highest levels of share ownership in the world which remain the most popular asset class for investors.

The ASX commissioned a study which found about 7.3 million people, or 43% of the adult Australian population, participated in the Australian share market either directly (via shares or other listed investments) or indirectly (via unlisted managed funds).

All public companies, of course, encourage their employees to also be shareholders. Additionally recent changes have been instigated so that smaller start-up companies can give their employees options in shares without incurring taxation liabilities as was the case previously.

There are also a number of groups which seek to align individual shareholders or workers interests such as Australian Shareholders Association

Best wishes