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The absence of external shareholders means there are no conflicts of interest between the claims of consumers and owners, leaving mutuals no incentive to exploit their customers for short-term gain.
But if the number of external shareholders exceeds 500 investors, the SEC might want to revisit that exemption.
Similar(58)
Analysts described the vote as "tight, very tight" with Pirc, the shareholder advisory group, suggesting the lack of external shareholder support for Dunkerton's re-instatement might present problems "further down the line".
Two-thirds of external shareholder votes were cast for James's removal as a director; he needed the votes of the Murdoch family, which controlled 40% of the stock, to retain his position.
It is showing a way to organise economic and social activities in the interests of those who work for or deal with those organisations, rather than for external shareholders.
Few of Sports Direct's external shareholders have ever been impressed by its corporate governance but most have consoled themselves with a look at the share price, which went up in spectacular style for more than half a decade.
However, under a corporate governance structure that allows insiders to control key corporate decisions through dominating voting power, independent monitoring by the board of directors or intervention by external shareholders is difficult.
The fundamental value of equity capital of a company is important for both management and external shareholders.
Mutual companies do not have external shareholders but all members of the company are considered owners.
One of the key differences is that the residual risk in pension funds is collectively borne by the beneficiaries and the sponsor's shareholders while in the case of life insurers it is borne by the external shareholders.
Because co-operative and mutual banks are not owned by external shareholders, they can put the interests of their customers first.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com