Corporate Governance in Argentina - Term Paper Example

Download file to see previous pages 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 governance 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 given 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 regarding 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 ...Download file to see next pagesRead More