Limited Company 問題
A limited company is invested in by the shareholders, but managed by
the directors. Shareholders cannot challenge the management decisions of the directors. Such arrangement is unreasonable, and adversely affects the operation of a company.’
Do you agree? Could someone to explain it to me? Any examples to
illustrate your view.
- peterchan7708Lv 71 十年前最愛解答
Directors have the responsibility of running the company in a way to achieve maximum profit for its shareholders. This goal is implicit in the appointment of directors. In appointing a Director the shareholders place their trust in the Director to achieve that goal and the Director has autonomy in making decisions bearing that goal in mind. Therefore Shareholders seldom challenge the decisions of their Directors. This is not a rule, but rather a standard practice in Limited Companies. And personally I do not think it is unreasonable and would adversely affect the operation of the company. Directors usually are experts in their field whereas shareholders may not be so. If in the process of deciding what is good for the company a Director gets frequent interference from the shareholders, his decision making would then be affected, sometimes unneccessarily so. In not doing so does not mean that Shareholders cannot do so. If they think the goal of achieving maximum profit has not been done, they can of course vote the Director out in the company's AGM.