What is a key aspect of ordinary shares compared to preference shares?

Ordinary shares are fundamentally characterized by granting voting rights to their holders. This means that shareholders typically have a say in important company decisions, such as electing the board of directors and approving major corporate policies or changes. This aspect makes ordinary shares distinct from preference shares, which usually do not confer voting rights to their holders.

The voting rights associated with ordinary shares enable shareholders to influence the governance and direction of the company. This involvement is a significant appeal for many investors as it allows them to participate in the management and success of the organization.

In contrast, fixed dividends are associated with preference shares, which typically guarantee a set dividend before any distributions are made to ordinary shareholders. Various other features, such as priority in liquidation, also differentiate preference shares from ordinary shares, further underscoring the unique role of ordinary shares in corporate finance and governance.