How does an organization have a social responsibility towards owners’ and shareholders’?
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Answers
Explanation:
1. Responsibility to Shareholders:
The responsibility of a company to its shareholders, who are the owners, is indeed a primary one. The fact that the shareholders have taken a great risk in making investment in the business should be adequately recognize
Shareholders who are the owners of business should be provided with correct information about company to enable them to give them true and fair position of the company to enable them to decide about further investments.
Company should provide a fair return on the investment made by shareholders. If shareholders do not get proper dividend then they will hesitate to invest additional funds in the concern. Shareholders should be kept fully informed about the working of the company for healthy growth of the business. The Companies Act 2013 requires company to give full disclosure in the published statements.
Company should strengthen the share prices by its growth, innovation and diversification. At the same time shareholders shall also offer wholehearted support and co-operation to the company to protect their own interests.
Answer:
The main responsibilities of business towards shareholders are: To ensure safety or capital Investment. To provide equal opportunity to all the shareholders to participate in the management of the business as required by the law. To provide a fair and adequate return on shareholders' investment.