shareholder

Fin

a person or organization that owns shares in a limited company or partnership. A shareholder has a stake in the company and becomes a member of it, with rights to attend the annual meeting. Since shareholders have invested money in a company, they have a vested interest in its performance, can be a powerful influence on company policy, and should consequently be considered stakeholders as well as shareholders. Some pressure groups have sought to exploit this by becoming shareholders in order to get a particular viewpoint or message across. At the same time, managers must, in order to maintain or increase the company’s market value, consider their responsibility to shareholders when formulating strategy. It has been argued that on some occasions the desire to make profits to raise returns for shareholders has damaged companies because it has limited the amount of money spent in other areas, such as the development of facilities, or health and safety.