It is easy to buy stock and just forget about it until you are ready to sell. But as a stockholder, you are an owner of the company in which you invested. As an owner, you have certain responsibilities to the company and its other stakeholders in addition to the responsibilities you have to your own financial affairs. Each company in which you invest affects many stakeholders locally, nationally and globally. What you do as a responsible stockholder can make a difference in the value of your investment to you and others.
Monitor Your Investments
Your first duty to your own financial well-being is to monitor the company's public announcements, quarterly and annual reports and any stock analyst comments and news articles written about the company or its industry. Any company that disregards environmental concerns, workplace conditions and employment problems and posts questionable revenues is not likely to remain a good investment. Consider the cases of companies that have had problems, including Allied Chemical, Exxon, Enron and British Petroleum. Evaluate your holdings according to their levels of good corporate citizenship as well as their abilities to post high revenues.
Update Your Records
Your duty to the companies in which you invest is to keep your stockholder records up to date. If you move, add an email address, change your phone number, change your name or create a living trust, inform the company's transfer agent and investor relations department. Most major transfer agents have online forms to use in updating your contact information. Call or email the investor relations department with the same information to update the department's mailing lists.
Vote Your Proxy
Every company occasionally presents a vote to the shareholders. This must be done to install new board directors and to ratify certain decisions made by the company and its directors. Most stockholders never receive voting material, which consists of your voting ballot or form assigning voting proxy to the brokerage firm holding your securities. If you do not register your vote, the brokerage firm is likely to vote in favor of board incumbents and their recommendations.
Corporate Social Responsibility
Many people complain about the attitude and ethics of some big corporations. Other complaints include CEO pay and outsourcing of jobs to other countries. Shareholders have some control over these situations. If shareholders write company management and vote against board incumbents, the pressure for change could sway company policy. As a shareholder, you can encourage corporate social responsibility and that is one of the obligations you have as an owner of the company.
- William Thomas Cain/Getty Images News/Getty Images