Share Ownership
- Created by: Rebecca Smith
- Created on: 09-04-13 14:28
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- Share Ownership
- Divorce between ownership and control
- The owners are the shareholders
- The people who control the company and make the decisions everyday are the managers
- In many private limited companies however the shareholders are the managers
- In public limited companies the shareholders and managers are often different groups of people and this creates a divorce between ownership and control
- It is often that the owners and managers have different objectives
- Can cause conflict
- Shares
- Many of the shares of public limited companies are owned by financial institutions, such as insurance companies and banks
- Only around 14% of plc shares in the UK are owned by individuals
- The financial institutions often put pressure on the managers of plc's to pay out a lot in the short term, in order to pay their own shareholders, leaving less funding of long-term investment than managers might want
- Divorce between ownership and control
- Many of the shares of public limited companies are owned by financial institutions, such as insurance companies and banks
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