Company Reporting Shareholders

2729 Words Jan 18th, 2015 11 Pages
2.1 Introduction
Good company reporting is absolutely necessary and vital as it provides valuable information to its shareholders, creditors and other stakeholder groups who may have the interest in knowing the position of the companies and their activities. It is equally important to maintain an equilibrium or balance between the cost of collecting and publishing the information and the cost of finding the information by the respective readers. It does not necessarily mean that adding bulks of information make the report a good one. It is the quality of information that counts. Government is highly dedicated to affirm that reports maintain a certain degree of quality rather than large and unwieldy information. Trade and Industry
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Berle and Means’ in their analysis which is based on the separation of two concepts , ownership and control, wherein traditionally the owner could exercise his discretion and powers according to his will and an assumption was made that he would be doing the same.

The same assumption was carried forward to the present conditions with the same expectations about the business to be run in owners’ welfare but with a change that the owners position been reduced to that having a set of lawful and realistic interest. On the other hand the group having control are in a position having legal and realistic powers over it. This may cause a divergence of interests between the owners and the controllers which divorces the relation between ownership and control. Berle, A., and Means, G., (1991).

The informational imbalance between the investors and managers could be redressed with the help of disclosure regulations and it also help to avoid divergence of interest between the owners’ and the managers which empower the owners to take more active position in decision making and monitoring the managers. Sargent, M., A, (1987)

An unambiguous legislative idea of corporate disclosure is indeed to promote fair corporate suffrage. This