In the past 50 years in the US the amount of shares owned directly by individuals has dropped from 70% to only 30% today. This means that the majority of share are represented by agents, i.e. banks, pension funds, investment funds, etc... Indirectly, we are very much shareholders. In the matter of good corporate governance and social responsibility, we would like to influence the corporations that we hold shares in, directly or indirectly. Some of the agents heed this trend and are becoming more active in shareholder meetings by protesting and speaking out about CEO compensation, overly large severance payments, and promoting investment decisions towards sustainable development, fair trade and socially responsible practices. Some corporations are fighting back, and are now calling for regulation of the agents - who would then lose some of the normal shareholder rights. This does not seem right, as the corporations are working with other people's money, and shareholders have the right to determine how they want the corporation to behave, and whether to optimize (stakeholder value) or maximize (shareholder value) profits. If the beneficiary owners of the corporation opt to be represented by an agent, then they should be able to transfer these rights to the agent, not be forced to hand them over to the board of directors or the management.
In Australia direct ownership is rising, with 53.7% of the population now owning shares directly. The Shareholders' project has been launched by a group of people with expertise (such as the St James Ethics Center) and interested in shareholder-corporate relations to see what the rise in share ownership in Australia might mean for individual and institutional investers, as well as for society overall. More on the project here.
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