Corporate Governance in Argentina Term Paper Example | Topics and Well Written Essays - 1000 words

Corporate Governance in Argentina - Term Paper Example As has been realized, having active majority shareholders might be positive and present good governance since they could give active oversight when it comes to management and also give a ready source of capital support. However, these majority shareholders could also work against the interests of smaller shareholders. Most of these big companies in Argentina do work as groups of companies that are diversified and having a common ownership and control. To them, it is very normal for the profits reaped from these group companies to be used as cash cows in the financing of growth for the capital hungry firms in the group. The development of such groups was partly as a means of effectively financing the capital intensive enterprises. Major changes have occurred in the corporate governance sector in Argentina during the past decade (ACCA 8). 2.0 Rights of Shareholders and Key Ownership Functions As far as Rights of Shareholders and Key Ownership Functions in Argentina’s corporate g overnance are concerned, they seem to concur with OECD principles. In the Argentina’s corporate governance, shareholders have various rights that are provided for them. These rights seem to have a full correspondence with the requirements of OECD after they were reformed following the roundtable discussions and changes in legislation after the crisis where major companies found themselves in economic scandals. These rights include the right to get informed on the operations of their business where they have to be periodically informed on any issues arising and the trend their business is taking. An annual report on the current trend and board’s opinion on the upcoming business plans and the corporate financial statements are also given to shareholders by the board of directors. This information could be obtained from the supervisory board by a request for those shareholders with not less than 2% of capital ownership and through investigations of those denouncements giv en by shareholders who represent not lower than 2% of capital contribution. The shareholders also have a voting right dependent on the extent of shares owned and this right needs to be exercised within the formal dispositions of legislation and by-laws. The shareholders have thus the right to be given the opportunity to participate and vote effectively in the general shareholder meetings. They should therefore; be informed on the rules, voting procedures and any other relevant information that governs general shareholder meetings. The shareholders also have the right to being given a secure method of registering for ownership. They should be able to convey or transfer their shares besides being able to elect and remove the board members when need arises (OECD 18-20; Waring, et al. 205-207). The shareholders also have the inherent right of participation in the decision making processes that are related to certain fundamental corporate changes and should be sufficiently informed regar ding these decisions when they do arise. Such changes include the amendments done to the documents that govern the company such as decisions on the by-laws; authorizations of any additional shares which

Profitability & Social Entrepreneurship Essay Example | Topics and Well Written Essays - 2000 words

Profitability & Social Entrepreneurship - Essay Example The advent of the French Revolution brought about a trend whereby the masses sought to get equal opportunities and also use the principles of science that came with the Enlightenment in Europe to create the best possible economic system (Martinson, 2006: 137). Say's definition of 'entrepreneurship' is described by Drucker as 'shifting economic resources out of an area of lower productivity into an area of higher productivity and greater yield (Drucker, 2007: 19) This suggests that innovation has to do with efficient and effective use of resources for both the producer and for the consumer. For the producer, there is the need to find the best methods of providing the best products for consumers. Consumers also seek to get the best of products on the market. Innovation is therefore a very important element for the establishment and survival of businesses. Funding Innovation However, innovation is not easy in organisations. Innovation involves a lot of capital to fund research in a stru ctured system (Neff, 2003: 76). Neff (2003: 78) does an analysis of two businesses that produce the same product. There is a constant pressure on both of them to offer their clients the best products and this means they will have to find ways and means of producing goods and services. The issue here is that research and innovation is based on a high degree of uncertainty. However, these two businesses will have to find ways of going through these uncertainties to deliver better quality products to remain ahead of the other. They will therefore need to find ways of funding their research and development system otherwise, they will have to settle for serious risks relating to their survival. Businesses go... Profitability & Social Entrepreneurship Historically, innovation is thought of as the basis of business. Bessant & Tidd classify the process of innovation into two main categories. The first category is invention and the second is improvement. When something is invented that solves a genuine problem in the society, it is presented to the public to help them solve their needs. However, the normal mode through which this is done, is to get people to part with some consideration in order to use newly invented things to solve their problems. This therefore calls for the formation of a legally recognized business to act as an entity to monitor and manage the process of presenting the invented material to the public. This is done through the commercialization of the idea which involves exchange of economic consideration. As time goes on and a business gets competitors and new trends come up, there is the need for the creation of new products and processes to prevent the death of an organization. Bessant & Tidd therefore recommen d that a business needs a blend of structured and emergent systems to manage innovation. Innovation is central to all businesses around the globe. Invention gives the impetus for business in the commercial sense. Innovation is what keeps the business going. Both invention and innovation are based on research which demands a lot of funding. Thus a business has a primary objective of remaining innovative to survive and this means finding money to pay for research and operational costs.