What role do shareholders play in a company?

Shareholders play a crucial role in a company primarily by investing capital, which is essential for the company's operations and growth. When individuals or entities purchase shares in a company, they become shareholders and, in return, expect to receive dividends, which are distributions of profits, along with potential capital gains from an increase in the stock's value over time. This investment is fundamental as it provides the company with the necessary funds to conduct business activities, expand operations, and enhance profitability.

While shareholders do have a say in major company decisions through their voting rights at annual general meetings, they do not manage daily operations or directly design company policies. Their primary focus is on financial returns from their investment rather than the operational aspects of the business. Thus, their role is more about financial backing and oversight rather than hands-on management or policy creation. Furthermore, while shareholders can influence certain decisions, they do not represent public interests; that role typically falls to regulatory bodies or advocacy groups.