Talk:Joint-stock company/Archives/2013

Shareholders do not own the corporation

Shareholders of large public corporations are not the owners of the corporation. Ownership is determined in law as based on a bundle of rights and duties (See Honore' 1961). The typical shareholder has none of these rights and duties. This fact that shareholders of large public corporation DO NOT own the corporation is explained in Company Law and The Myth of Shareholder Ownership by Ireland (1999) (See http://kar.kent.ac.uk/1939/1/Myth_of_Shareholder_Ownership.pdf), Shareholder Ownership and Primacy by Velasco (2010) (See http://illinoislawreview.org/wp-content/ilr-content/articles/2010/3/Velasco.pdf) and Bad and Not So Bad Arguments for Shareholder Primacy by Stout (2002) (See http://www-bcf.usc.edu/~usclrev/pdf/075504.pdf) Also, see the book by Stout (2012) called The Myth of Shareholder Value, Greenwood (http://people.hofstra.edu/Daniel_J_Greenwood/pdf/Hofstra.pdf). There are a lot more I will cite if needed. Only if shareholders have control of the corporate decisions can they possibly be considered owners. They do not. Their vote in practice is ineffectual in determining Board of Director composition. Professor Bebchuk studied proxy contests conducted by all listed companies between 1996 and 2004, finding that only 17 corporations, with a market capitalization over $200 million, experienced proxy contests to replace management outside of the takeover context. Of these, only 2 of the insurgents won. “A plausible interpretation of the evidence is that, even when shareholder dissatisfaction with board actions and decisions is substantial, challengers face considerable impediments to replacing boards.” (Bebchuk 2005 p. 13) The bottom line: Shareholders of large public corporations are NOT the owners.Sigiheri (talk) 01:29, 5 May 2013 (UTC)

I reverted you since this article is about joint-stock companies, not corporations. The paragraph you removed had a good citation. One of your statements seems bizarre to me: "Only if shareholders have control of the corporate decisions can they possibly be considered owners. They do not. Their vote in practice is ineffectual in determining Board of Director composition." I don't see why "control of the corporate decisions" or "determining Board of Director composition" should have any bearing on the question of who owns the thing. Srnec (talk) 03:40, 5 May 2013 (UTC)

Okay, fair enough. Question: what is the difference between joint stock companies and public corporations? Regarding the issue of control and ownership, the law, specifically Honore' (1961), defines ownership as a set of rights and duties of which control is one. The idea is that an owner should be someone who has control over the thing. Other rights an owner should have include the right to sell the thing (shareholder own the share and can sell it), the right to destroy it, receive its profits (shareholders do this if the board declares dividends). Duties include responsibility for damages caused by the thing (shareholders responsibilities are limited by the law).Sigiheri (talk) 03:55, 5 May 2013 (UTC)

The so-called "owner" of a sole proprietorship can have limited responsibility in law. And since nobody can destroy real estate, I suppose it can never be owned, right? And if I slip into a coma and can no longer control my assets, are they fair game? I know Kramer from Seinfeld thought so, but I'm not sure if he's a reliable source. In short, you should edit the lede with sources instead of removing it. Srnec (talk) 03:03, 9 May 2013 (UTC)

As a person loses rights and duties to a thing, s/he looks less and less like an owner, that is correct. The law uses a set of resemblances/bundle of right and duties to determine ownership. See Honore (1961). — Preceding unsigned comment added by Sigiheri (talk • contribs) 03:16, 9 May 2013 (UTC)