The importance of shareholder participation for the corporate governance best practices

One of the most used meanings of corporate governance is “the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders”. Each company needs to keep a good balance among all elements to gain success and to be competitive in the marketplace.

Today any sector of the market is very competitive and many companies and industries try to find new business opportunities every day. Furthermore, the recent spread of the world economical and financial crisis has underlined the need of a new approach for companies. In order to face the crisis and to limit losses, many committees in every world nation have recommended legislative changes and many other solutions to exhort companies to adopting corporate governance best practices.

The aim is convincing companies to use austerity programs and a transparent communication system, in order to restore their credibility for the investors and stakeholders. One of the most important aspects in this new business approach is the shareholder participation in corporate governance best practices. A best practice is a method or a technique that has shown results superior to those achieved with other means, and that is used today as a benchmark.

The shareholder participation is one of the best ways to improve our corporate governance standards. This solution is very effective, because shareholders have strong economical interests to increasing the value of the company, which represents their interest and their investment. A good way is to give shareholders opportunity to contribute to the forming of company decisions and strategies, and also improving the flow of information between them and companies, contributing to a more efficient company communication. 

Sodali is an independent and conflict-free consultancy. Its business is to interface the companies with own investors, supporting corporate governance best practices, transparency, investor responsibility standards and shareholder rights. Thanks to this position, Sodali can act as a mediator for information, helping clients assess and mobilize shareholder support for AGMs and other strategic activities.