ABiQ outlines why directors should know who their shareholders are. Shareholders are entitled to receive dividends when the company is in a good financial position. The board of directors is responsible for managing the day-to-day affairs of the company. As a director, you are directly responsible for protecting and managing shareholder interests.
Do board directors know their shareholders? Should they really care? In this article, ABiQ outlines why directors should know who their shareholders are.
What is the role of shareholders?
A shareholder can be a person, company or organisation that owns stock of a company. Shareholders are entitled to receive dividends when the company is in a good financial position. The shareholders of a company have a responsibility to ensure that the company is well run and well managed. They oversee this through the board of directors.
Being a shareholder comes with certain responsibilities, including:
- The responsibility to appoint the board of directors.
- Holding the directors accountable for their actions.
- Making decisions on instances the directors have no power over.
- Checking the financial statements of the company.
What is the role of a board?
The board of directors are appointed by the shareholders as agents of the company. The board is responsible for managing the day-to-day affairs of the company. The board of directors is, therefore, responsible for protecting and managing shareholders’ interests in the company.
The responsibilities of a director includes:
- Provide direction for the organisation.
- Monitor management’s performance.
- Implementation of strategies.
Knowing your shareholders
Knowing your shareholders is important. As a director, you are directly responsible for protecting and managing their interests.
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