Divorce Between Ownership and Control

0.0(0)
studied byStudied by 0 people
linked notesView linked note
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/3

encourage image

There's no tags or description

Looks like no tags are added yet.

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

4 Terms

1
New cards

What is the divorce between ownership and control?

The divorce between ownership and control happens when the owners of a business do not control the day-to-day decisions made in the business

2
New cards

What is the most common example of divorce between ownership and control?

The majority of shareholders in public companies are not involved in operational decision-making by the companies in which they have invested

3
New cards

What is the difference between control and ownership?

  • Control: Board of Directors

  • Ownership: Shareholders

4
New cards

How would you handle issues?

  • Ensure that financial rewards and incentives offered to managers are aligned with shareholder interests- e.g. based on the share price, dividends and profits achieved

  • Implement suitable corporate governance procedures to ensure shareholders are protected as far as possible (e.g.through non- executive directors, management remuneration committee)

  • Company legislation ensuring that Directors are accountable for their actions to shareholders