Here Is Your Essay on the Shareholders’ Movement in India

In the socio-cultural environment of business, the share­holders‘ movement is a recent offshoot of the professional management movement.

A company is managed by two main organs, the share­holders in the General Meeting and the Directors acting as a Board. Though theoretically the General Meeting could direct the business of the company but actually it is not feasible.

Hence law vests the executive authority in a Board of Directors, leaving only the ultimate authority to the general meeting which is not generally exercised because shareholders are widely diffused and they have small individual share­holdings.

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A company is a democratic institution and company management is said to be a democratic management. But this is in theory and in practice it has become sham democracy.

Company management degenerates into oligarchic management which means management in the hands of a few. These few people form themselves into a group. The group exercises powers of control to its own interest disregarding the interests of the shareholders.

In theory, shareholders are the masters of the company but in actual practice they are often only sleeping partners who hardly rouse from sleep to do anything tangible.

They have neither the time, nor the knowledge, nor do they bother with the management of a company so long as the management of the company is in the hands of competent and honest directors and executives.

Moreover, many shareholders regard their shares as a commodity rather than as a true investment in a company. They hold shares for profit and not for control over management. .

The Companies Act requires the holding of an Annual General Meeting (AGM) of the company and gives the share­holders the power to exercise their rights at the meeting.

But practically the majority of shareholders find it inconvenient to attend such a meeting because of their indifference, apathy, ignorance and very little stake. Hence an effective AGM is almost impossible.

But the situation is rapidly changing. The annual general meetings are being taken seriously both by the shareholders and the directors.

Shareholders are up and doing. Shareholders attend AGMs and actively participate in deliberations. The shareholders are conscious of their rights and the gifts and lunch given at the AGMs cannot buy them any longer. They are eager to exercise their legitimate rights.