United Kingdom and USA have a system where private shareholders have ownership of their companies. Lots of companies in these countries are quoted in stock market. The way they can finance their companies is by opening their capital to private investors. As USA has a great influence in the world, this pattern tends to be applied in lots of countries even at a lower level. We can see that European companies (except UK and Holland) have bigger investors and try to keep a close relationship with them with also the presence of controller shareholder which often comes from the family. They have a power at the board. American companies are composed with lot of individual investors and also big funding. The companies in Europe also have independent directors but the difference is that in the US, they have more stock options. It means that they are more interested in the value of the share than the European directors.
[...] But when the market is saturated, the cake stops to grow and a company will be forced to take another company's share of the cake in order to increase their profits and to grow. This case leads to monopoly situation where one or two companies will control the market and the price. Unemployment will go up as there are only two big shares now instead of ten smaller ones. (Regard critique sur les concentrations, M. Chesnais). This is one way by which companies can grow in order to satisfy shareholders and give them more dividends. [...]
[...] We don't need a revolution of the financial system, the American pattern is not perfect but if it could be modified in order to reduce redundancy and respect the environment, it could be made to adapt to the needs of the actual society. Others ways of financing The financial market seems like a jungle for investors and even for companies. Directors are stressed by the evolution of their share value and just act in that way because the majority of their companies are quoted on the market. [...]
[...] They will of course demand results because they want to make money but they wait for it and they won't have any problems like USA/UK pattern where the absence of results will be immediately lead to investors moving away, selling their shares or asking the substitution of directors. In Germany, Japan or even in France and Sweden, directors have more time to manage; they can work in the long run and without the immediate pressure of shareholders. According to the study of the Dutch, countries like France and Germany take their strategic decisions based on the time of pay back whereas in United States, UK and Holland, they make a decision based on its influence on the share value (Dirk Brounen, Abe de Jong and Kees Koedijk. [...]
[...] I think that it is normal that shareholders to ask for, in administration council, the substitution of a company's board if this one isn't competent. With this system, small companies are often taken over by bigger ones which cause unemployment and even in the big companies; there is redundancy in order to reduce costs. In both cases there is a lot of unemployment. This pattern is against the labor and favors just shareholders. The company is not a social institution. [...]
[...] Indeed, companies under high pressures, could have problems in the management also, working under such high pressures is not a good thing because you will take an easy option too quickly just to satisfy shareholders and you will see some weeks, months or years later that it wasn't the best option because you did not take care of the important elements. For example, the decision of taking over a company that, we discover later, was in a really bad situation leads us to losing money. [...]
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