Should shareholders be treated like Kings?
According to Richard Puntillo, in theory, publicly traded corporations have shareholders as their kings, boards of directors as the sword-wielding knights who protect the shareholders and managers as the vassals who carry out orders. In practice, in the past decade, managers have become kings who lavish gold upon themselves, boards of directors have become fawning courtiers who take coin in return for an uncritical yes-man function and shareholders have become peasants whose property may be seized at management’s whim.
When a listed company announces an acquisition, commerciality is often cited as the reason for failure to disclose the purchase price. But with Australia’s corporate graveyard littered with the write downs of overpriced acquisitions past (think Fosters, Paperlinx,AMP, Lend Lease, RIO and Valad) it is about time that companies treated their shareholders like kings.
By Roger Montgomery, 1 September 2009
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
INVEST WITH MONTGOMERY
d. gerace
:
HI ROGER HAVE READ YOUR EMAIL AND I FOUND YOUR VIEWS VERY VERY INFORMTIVE PLEASE LET ME KNOW HOW YOU MAY BE TO ASSIST ME IN ANY FUTURE SHARE PURCHASES I CURRENTLY HAVE SHARE PORTFOLIO YOUR GUIDENCE WOULD BE MOST APPRICIATED KINDEST REGARDS DOMENICO
rogermontgomeryinsights
:
Hi Dominic,
Glad you like the blog! Unfortunately, at this stage I am not able to offer you any personal advice. I can, however, keep updating my blog with tips and insights that I hope you will find useful and help guide your stock selection process.
Warmest regards,
Roger