Asset control devices for Ben and Jerry`s Homemade

Assetcontrol devices for Ben and Jerry’s Homemade

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Assetcontrol devices for Ben and Jerry’s Homemade

Assetcontrol strategies employed by a firm with a high desire fornon-profit making goals must have strict restrictions on corporategovernance. In Ben&amp Jerry`s case, asset control was bound within a supportivelegislature of Vermont, variations in stock voting rights, and thecorporate charter of the company.

In1998, the Legislature of Vermont amended a provision within theVermont Business Corporation Act. They gave the directors of anycorporation the power to put into consideration the welfare of itsemployees, creditors, suppliers, and customers during thedetermination of acquiring an offer in the corporation’s interest.The mechanisms reinforced the ability of Ben &amp Jerry to be aVermont-based firm and maintain its independence. The impact of thislegislation on a company is an enhancement of its corporate image asall the stakeholders are considered. They will be satisfied each timethey interact with the company hence they end up talk good about itincreasing its market share in the economy (Bhadeshiya, 2012). Ben &ampJerry should adopt this control so as to enhance its corporate socialresponsibility to better the lives of all its stakeholders whileconducting business.

Thecompany’s shareholders approved amendments to their CorporateCharter Restrictions at their annual meeting. The board was givenmore power to propagate the firm’s mission. The board was dividedinto three divisions whereby one division was elected annually for athree-year tenure. A two-thirds vote of the shareholders was neededto remove a director from office. Vacancies due to the removal ofdirectors were filled by two-thirds of votes from directors inoffice. A number of votes needed to amend, alter, or adopt aprovision were increased to at least two-thirds of the stockholders(Bruner, 2014). Authority comes with responsibility hence thisincrease in power of directors to carry out the missions of Ben &ampJerry came with more liabilities. Responsibility and personalliability of the directors increased, so they had to work onimpending competition, security issues, environmental concerns, andhealth matters. Ben &amp Jerry`s Homemade should adopt this toensure the directors become responsible and their being into officeis supported by the majority of the company through the majorityvotes to get in office.

Ben&amp Jerry’s hadthree classes of equity including class A and B common then Class Apreferred. Class A common holders were eligible to one vote for ashare held. B common mainly for insiders had ten votes for each shareheld, was not transferrable but convertible to Class A common thentransferred. The principals held forty-seven percent of the totalvoting power. Non-board members maintained fifty-one percent votingpower. TheBen &amp Jerry’s Foundation, which is a community-action group,exclusively held a class A preferred stock(Hunnicutt, 2015).It had a special voting right concerning some businesses and alsolimited the voting rights of common shareholders. It is important tosegregate the stockholders into different groups to cater for peoplefrom all classes in the environment. Different stocks have differentprices hence one gets to choose a class they can afford. Ben &ampJerry’s should adopt this to bring diversity to their organization.Hence, they will be able to tap revenue from all the population.

Ben&amp Jerry’s return on assets entails the years 1999 at 3.5%, 1998at 3.7%, 1997 at 2.6%, 1996 at 2.8%, 1995 at 4.5%, and 1994 at 1.4%.The return on equity entailed the years 1999 at 8.9%, 1998 at 6.8%,1997 at 4.5%, 1996 at 4.7%, 1995 at 7.5%, and 1994 at -2.6%. TheExpected Rate of Return can be obtained by multiplying the returns onassets by the returns on equity, and add the results(3.5*8.9)+(3.7*6.8)+(2.6*4.5)+(2.8*4.7)+(4.5*7.5)+(1.4*-2.6)=111.28%.Nonetheless, the company’s returns had a lot of variance in thereturns of stock, apparently not described by the market, as it wouldhave been expected.

References

Bhadeshiya,H. (2012).&nbspAStudy on Investors` Expected Rate of Return.Saarbrücken: LAP LAMBERT Academic Publishing.

Bruner,R. (2014).&nbspCasestudies in finance. Homewood, IL:Irwin.

Hunnicutt,S. (2015).&nbspCorporatesocial responsibility. Detroit, MI:Greenhaven Press.