Frequently Asked Question: What is a minority shareholder?
A minority shareholder is exactly what it sounds like: an individual or organization who holds shares in a corporation but does not control a majority of the votes. In companies that are widely-held (as opposed to majority held companies), no one holds more than a 10% share.
The voices of many minority shareholders get lost when annual shareholder meetings are dominated by more powerful and influential shareholders. Corporations that are concerned with corporate social responsibility and ethical business practices must remember to include minority shareholders’ interests and concerns in their decision making sessions because they too are stakeholders. Only by considering the needs of all stakeholders can a corporation succeed at being – and be seen to be – ethically and socially responsible.
An ethical decision is not one that keeps all – or necessarily most – stakeholders happy. Rather, an ethical decision carefully considers the impacts of the decision on as broad a base of stakeholders as possible. The right decision may upset a specific constituency.