Stockholders Right and Corporate Governance, Consumerism

The Shareholder’s Rights in Corporate Governance

Corporate governance is the system of rules and responsibilities delegated to several groups within a corporation as well as procedures on handling corporate matters. One of the groups, shareholders, is given certain rights as owners of corporations. These rights are protected by law, and honoring them is one of the objectives in corporate governance.


Shareholders have rights to vote on company decisions. They can vote on a variety of corporate matters including voting in officers, company acquisitions and mergers or liquidations of company assets. Voting on these matters generally take place when corporations have their annual meetings. Shareholders have the right to vote in person or by proxy if they can’t attend the meetings. They can also vote by mail, telephone and/or by mail if corporations have these measures in place.


Shareholders also have rights to inspect their corporation’s financial information. Inspecting the books gives shareholders a chance to view how their corporations are performing. This can be critical to shareholders’ decisions to buy more shares or sell off what they already own. This right isn’t as important to shareholders in public corporations because they can get the same information from the Securities and Exchange Commission. Public corporations have to file their financial information each year, and it’s available to anyone interested in buying shares. Private companies do not have to file this information with the SEC; shareholders in private corporations still have the right to see their corporations’ financial information.

Dividend Entitlement

If corporations are distributing profits in the form of dividends, each shareholder has the right to receive them. Dividend amounts are determined by the corporate officers and not by the ownership interests of the shareholders. These amounts can fluctuate yearly based on the corporations’ earnings for that year. With that in mind, corporations with low earnings, net losses or have other plans with the profits to improve their businesses may not pay out dividends. However, corporations must pay every shareholder a dividend if they’re distributing them and cannot select just a few to pay profits to and neglect the rest.

Rights to Sue

Shareholders who have been wronged by their corporations also have the right to sue. For example, if shareholders didn’t receive their entitled share of dividends or were denied access to their corporations’ financial information, they can bring legal actions against their corporations. Shareholders seeking to sue their corporations should check with their local authorities first on how to proceed.


One of the objectives of corporate governance is to be fair to all shareholders. However, some corporations are issuing dual stocks that challenge the fairness and equality of all shareholders the corporate governance is trying to protect. Dual stocks are not available to all investors, and there are different levels of rights associated with each one. For example, one class of stocks could be issued for common investors, while another class is available to company executives, founders and their families. It’s possible that the shareholders who own common stocks have less voting power than those who own the other class.


Consumerism is the theory that a country that consumes goods and services in large quantities will be better off economically. Sometimes, consumerism is referred to as a policy that promotes greed.

Consumerism is also credited with a movement towards consumer protection that promotes improvement in safety standards and truthful packaging and advertisement. Consumerism also seeks to enforce laws against unfair trade practices and truthful product guarantees.

Over-consumption is sometimes negatively attributed to consumerism. For instance, some people might argue that Christmas holidays are a time of heightened consumerism, due to the large amounts of goods that are purchased during this time. At its core, consumerism postulates that the more materials acquired the better.

History of Consumerism

The consumer society emerged in the late seventeenth century and intensified throughout the eighteenth century. The change was attributed to a growing middle-class that embraced new ideas about luxury consumption and the growing importance of fashion as a motivator for purchasing rather than necessity. Others argue that consumerism was a political and economic necessity for the reproduction of capitalist competition for markets and profits, while still others point to the increasing political strength of international working class organizations during a rapid increase in technological productivity combined with a simultaneous decline in scarcity that caused a consumer culture to rise that was based on therapeutic entertainments, home ownership and debt.

The industrial revolution dramatically increased the availability of consumer goods, which led to the advent of the department store, which represented a paradigm shift in the consumer experience. For the first time, customers could buy an astonishing variety of goods, all in one place, and shopping became a popular leisure activity.

Advertising also played a major role in the emergence of a consumerist society, as goods were marketed through various platforms in nearly all aspects of life, advocating that the viewer’s life was in need of some product. Over the years, advertising changed with the evolving sophistication of consumer attitudes and tastes. Advertising media evolved as well as marketers tried to stay in touch with audiences’ constantly changing sensibilities and preferences. For example, billboards were created around the time that the automobile became prevalent in society in order to provide viewers with short details about a brand or a “catch phrase” that a driver could spot, recognize, and remember.

In the 21st century the focus of advertising is on technology and digitization of culture. In this new paradigm, consumer data and individual personal preferences have become increasingly available and actionable for marketers.

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