How To Turn On Your Shareholder’s EQ To Do Things Right From The Start?
Very often we hear from our clients of their moaning and complaints against their partnering shareholders.
Basic things like agreeing with fellow shareholders what to Disagree from the start of business ventures together was not done via Shareholders’ Agreement.
Sometimes we heard from clients about what their company Directors were doing something not right. This boils down to not construing their Constitution correctly to reflect their intentions of how Directors should behave. To make matters worse, these Directors are very often the Shareholders of the company !
Then the company starts to grow, and new investors are being invited to participate in the growth of the company. However, Share dilutions were not planned. Worse is when Management Controls are diluted not according to intention.
Then the company would like to give some Shares to the Employees via ESOP ( or Employee Stock Options Plan ). However, the KPIs were not clearly notified and mutually agreed, improper implementations of ESOP led to poor Employee Morale as a result. A Good Intention to retain loyal Profit-Making Employees becomes a demoralizing Scheme, expedites the exodus of Good Employees.
To sum it up, Shareholders need to Turn on their EQ to do things Right from the start.
Just my 2-cents worth.
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