ACCA Applied Knowledge · Business and Technology · Governance in business organisations
A listed company's shareholders are largely institutional investors, who have begun voting against the board's proposed executive pay awards. Which feature of stakeholder influence on governance does this best illustrate?
This shows shareholders using their voting rights to hold directors accountable. Institutional investors are owners with power at general meetings, and voting against executive pay is a direct way to influence board decisions and remuneration. It is not collective bargaining, regulatory sanction or supplier pressure.
- AShareholders exercising their rights to hold directors accountable through votingCorrect
- BEmployees using collective bargaining to influence pay
- CRegulators imposing sanctions for non-compliance
- DSuppliers influencing the company through credit terms
Explanation
Voting against remuneration proposals is a way shareholders, as owners, hold the board to account at general meetings. The other options describe different stakeholders (employees, regulators, suppliers) using different channels, which are not what the scenario describes.
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