The notion of shareholders as owners is incorrect.

1. Who owns the corporation? Prof. dr. R. A. M. Pruijm RA

4. Why is that important? Who owns the corporation?

8. Largest Public Companies 247 1884 22 146 Citigroup 275 66 12 46 Microsoft 358 697 20 163 General Electric 410 224 40 335 ExxonMobil Market Value Assets Profit Sales

10. Stora Kopparberg share

11. Dutch East India Company share

21. Shareholders (Principals) Firm Owners Agency Relationship Risk Bearing Specialist (Principal) Managers (Agents) Decision Makers which creates Managerial Decision-Making Specialist (Agent) Hire The Agency Problem

24. Employees Suppliers Corporation Consumers Lenders Community Shareholders Corporate Stakeholders

25. Shareholder power =

28. Competing Models Shareholder wealth maximization Shareholders and Directors Shareholder primacy Stakeholders Managers and Directors Stakeholder theory Towards What End? Who’s in Charge?

31. Misunderstanding

37. Empirical evidence?

43. Examples?

44. Who are shareholders?

47. Large investors 2% 41% Stichting Prerente Aandelen 0,3% 6% Aegon 1% 8% Aviva 1% 5% Eureko 0,3% 6% Kempen Capital Mgt. 1% 7% Fortis 5% 3% UBS 2% 10% ING Voting rights Holding

48. The loyal shareholder? Institutional: Holding period 15 months Private investors: Holding period 7 months ABN Amro shareholders: Holding period 13 months

49. In Perspective 7 months 2006 2 years 1992 7 years 1960

50. Long-term investment? No. Shareholders are short-term investors

53. It is all about profit

55. Active voting? Only 40% of the shareholders are present at the annual shareholders meeting of the largest Dutch companies

58. A shift in power

59. More companies went bankrupt through mismangement than by activist shareholders Ruud Pruijm But

61. CV Prof. Dr. R. A. M. Pruijm CPA is management-consultant, interim-manager and professor emeritus Accounting Information Systems at the Erasmus University Rotterdam. He was recently appointed as part-time lecturer Corporate Governance at the Fontys Professional University. He is a well-known expert in corporate governance, corporate social responsibility, and business ethics. Corporate governance is a generic term that describes the ways in which rights and responsibilities are shared between the various corporate participants, especially the management and the shareholders. Corporate governance is about promoting corporate fairness, transparency and accountability. Corporate social responsibility is about open and transparent business practices, that are based upon ethical values and respect for employees, communities, and the environment, designed to deliver sustainable value to society at large and to shareholders. For over 30 years Professor Pruijm has been speaking to top level business executives and organizations all over the world. He is author of numerous books and articles, and is a regular guest on radio and television. As an independent observer and thought-leader he is frequently consulted by the press, politicians, and business leaders. Office: Kievit 12 -113 5111 HD Baarle Nassau Tel. 013 – 507 03 41 Mobile 06 547 36 391 E-mail: [email_address]