Corporate management and interests of the majority owner

Rajnović, Ljiljana and Mihajlović, Nenad (2024) Corporate management and interests of the majority owner. International Review, 12 (3-4). pp. 199-208. ISSN 2217-9739

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Abstract

In this paper, the authors analyze the position of the majority investor of a legal entity, taking into account the rules of corporate governance and the interests of other interest groups. Although corporate governance is present in practice in all countries of the world, including the Republic of Serbia, since the companies got their current form, this phenomenon is recognized as one of the key limiting factors of the interests of various stakeholders, i.e. persons interested in the company's operations. The problem of corporate governance boils down to the system of establishing relations between different interest groups in the company, company owners, management and the company itself, regulated by law and business practice. Adherence to good rules of corporate governance should contribute to the realization of the generally known interests of all stakeholders, which is a successful and long-term business and thus the realization of the goals of all persons interested in the company's operations: majority capital owners, minority owners, company management, the company itself, creditors, farmers, local communities and the state. The authors believe that among the multitude of stated interests, the primary interest is the owners of the majority of the shares, who invest the most resources in the company and therefore bear the greatest business risk. The majority shareholders provide funds for the business of the company, leave the management to the manager, with the expectation of a return of the invested funds and additional earnings. Given that the biggest risk of the company's business is on his side, it is considered that their interest in the company is the greatest. The authors believe that because of this, the interest of majority capital owners should be primary in relation to other interest groups.

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