What Rights to Shareholders have?

As a shareholder, former executive and former board member of an Alaska Native Corporation; I have been in the front lines of governance debates.

As ANCSA corporations, we are private companies, not publicly-traded companies. The closest thing I’ve been able to uncover in my research on the legal rights of shareholders is in the link below:

Below is the excerpts from the linked article that apply from my assessment.

Right to Share in Profitability

As partial owners of the company, common shareholders have the right to participate in a company’s profitability for as long as they own the shares. The division of profits is based on the number of shares owned by a shareholder, and gains can be substantial to shareholders over time.

In addition to a share in profits generated by the company, shareholders also have rights to income distributions through dividend payments. If a company’s board of directors declares a dividend in a certain period, common shareholders are in line to receive it.

Dividends are not guaranteed, however. If the company is liquidated, common shareholders have the right to assets and income of the company after bondholders and preferred shareholders are paid.

Right to Influence Management

Common shareholders also have the right to influence company management through the election of a company’s board of directors.

In either case, individuals in the management of the company do not own enough of a stake in the company to influence who sits on the board of directors. Shareholders have the right to influence who holds management positions through control over the election of board members.

Right to Vote

Arguably, the greatest right for common shareholders is the ability to cast votes in a company’s annual or general meeting. Most common shareholder voting rights equate to one vote per share owned, resulting in greater influence from shareholders who own a larger number of shares.

The Right to Sue for Wrongful Acts

Common shareholders who feel their rights have been violated also have the right to sue the issuing company. A court has the power to enforce common shareholder rights when corporations are found to have violated their rights, either through a single shareholder complaint or as a class-action lawsuit.

However, Investopedia also discusses Shareholder Agreements in the link below:

“A shareholders’ agreement, also called a stockholders’ agreement, is an arrangement among a company’s shareholders that describes how the company should be operated and outlines shareholders’ rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders.”

Published by Trudy Sobocienski

My blog, "Beyond Leadership" is a creative place to share my personal feelings and thoughts while working in leadership roles for a variety of Alaska Native organizations, both for and not-for profit entities. An incredible leader and mentor of mine once asked while we were in Washington, DC, "What happened to you between the ages of 7-10 that motivated you to serve in a native leadership capacity". I was struck by that poignant thought and as such, include actual entries from my mother and my diaries beginning in the early 1970's. I enjoy sharing these excerpts because it captures the parallels she and I were experiencing throughout life, from two separate worldviews. Hers as a young mother of four and mine as her eldest child. I have never came across a book on leadership that lays bare a leaders personal feelings, thoughts, hopes, fears and dreams they were experiencing. So for me, my goal is two-fold: 1. Share the incredible life my parents created for my siblings and I growing up in remote Alaska; and, 2) Sharing my humanity, through my personal diaries and journals, while serving as the youngest-ever President/CEO for the Alaska Native Health Board. There are passages that will include significant policy issues I was working on throughout my career and travels. There are many more passages that do not. I cannot speak for my mom's passages, because I am reading them as I share them here, with you; with her permission of course.

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