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Shareholders have become an increasingly powerful and vocal stakeholder group in corporations.FalseTrue

Question

Shareholders have become an increasingly powerful and vocal stakeholder group in corporations.

  • False
  • True
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Solution

The correct answer is: True.

  1. Over the past few decades, shareholders have become an increasingly powerful and vocal stakeholder group in corporations. This is due in part to changes in the investment landscape, including the rise of institutional investors and activist shareholders.

  2. Institutional investors, such as pension funds and mutual funds, often hold large stakes in corporations and have the resources to monitor and engage with management. They can use their voting power to influence corporate policies and decisions, and they often advocate for good corporate governance practices.

  3. Activist shareholders, who buy shares in a company with the intention of influencing its direction, have also become more common. They often push for changes in strategy, governance, or management to increase shareholder value.

  4. In addition, changes in laws and regulations have given shareholders more rights and opportunities to influence corporations. For example, many jurisdictions now require companies to hold "say on pay" votes, which give shareholders a voice in executive compensation.

  5. As a result of these trends, corporations are under increasing pressure to listen to their shareholders and take their views into account when making decisions.

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