Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy

Suman Dey

doi:doi:10.11648/j.ijefm.20231105.17

Research Article |

| Peer-Reviewed

Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy

Suman Dey

Published in International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 5)

Received: 27 September 2023 Accepted: 16 October 2023 Published: 31 October 2023

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Corporate Governance has recently become an important issue in Bangladesh. The principal characteristics of effective corporate governance are protection of rights and privileges of minority shareholders and transparency of companies. The Companies Act of 1994, which was passed with the protection of minority shareholders as one of its key objectives, has fallen short of providing minorities with the security and remedy they were expecting against oppression. The main objective of the study is to evaluate the rights and privileges of minority shareholders in the family-owned firms on the perception of three major stakeholders of the sample companies. For this purpose, the study has developed a questionnaire based on recent literature survey and gathered the opinions of the executive/non-executive directors, Independent directors and shareholders of sample companies under the framework of 5 point likert scale. The gathered primary data have been analyzed by appropriate number of descriptive and inferential statistics. In examining the state of minority shareholders’ rights and privileges in the sample listed firms, the study takes the perception of the executive/non-executive directors, the independent directors, and the shareholders and finds that they have shown different views from each other, indicating that there are likely irregular/unmethodical practices of the board directors in this respect in the sample firms. In measuring the level of importance on different issues of corporate governance on listed family-owned firms of Bangladesh given by the respondents, the study observed that the groups have a significant difference on minority shareholders’ rights and privileges and an insignificant difference on cumulative voting rights. Finally, the study gives some recommendations for the remedies of minority shareholders.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 5)
DOI	10.11648/j.ijefm.20231105.17
Page(s)	273-284
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2023. Published by Science Publishing Group

Keywords

Minority Shareholders’ Rights and Privileges, Cumulative Voting, Annual General Meeting (AGM), Voting Rights

References

[1]	Adams, M. (1994). Agency theory and the internal audit. Managerial Auditing Journal, 9(8), 8–12.
[2]	Andrade, G., Mitchell, M., & Stafford, E. (2001). New evidence and perspectives on mergers. Journal of Economic Perspectives, 15(2), 103-120.
[3]	Bangladesh Enterprise Institute (BEI, 2004). The code of corporate governance for Bangladesh. Bangladesh Enterprise Institute, pp. 1-85, Dhaka, Bangladesh.
[4]	Berle, A., & Means, G. (1932). The Modern Corporation and Private Property. Macmillan. New York, 2(3), 45-53.
[5]	Chittagong Stock Exchange Workshop (2004). Corporate Governance in Bangladesh: Capacity Building of Securities and Exchange Commission and Selected capital market Institutions (Paper Presented in CSE, by Aries Group Ltd. of United States). ADB, Bangladesh.
[6]	Estamanco (Kilner House) Ltd v Greater London Council (1982)1 All ER 437,1 WLR 2, 8
[7]	Foss v Harbottle (1843) 67 ER 189.
[8]	Franks, J., & Mayer, C. (1997). Corporate ownership and control in the UK, Germany, and France. Journal of Applied Corporate Finance, 9(4), 30-45.
[9]	Khan, N. I. (2019). Statutory provisions of AGM of companies. Retrieve from https://m.theindependent bd.com/ home/printnews/199649
[10]	KPPB Law (2018). How to Protect Your Rights as a Minority Shareholder. Retrieve from https://www.kppblaw.com/protect-minority-shareholder-rights
[11]	La Porta, R., Lopez-De-Silanes, F. and Shleifer, A. (1999). Corporate ownership around the world. The Journal of Finance, 54(2), 471-516.
[12]	Lease, R. C., McConnell, J. J., & Mikkelson, W. H. (1983). The market value of control in publicly-traded corporations. Journal of Financial Economics, 11(1-4), 439-471.
[13]	Maher, M., & Andersson, T. (2000). Corporate governance: Effects on firm performance and economic growth. Retrieve from SSRN 218490.
[14]	Mallin, C. A. (2007). Corporate Governance (2nd Edition). Oxford University Press, Oxford, UK.
[15]	Menon, K., & Williams, J. D. (1994). The use of audit committees for monitoring. Journal of Accounting and Public Policy, 13(2), 121-139.
[16]	OECD (2004). Principles of Corporate Governance. OECD Publications, France. ISBN: 92-64-01597-3- No. 53533.
[17]	OECD (2013). Reform priorities in Asia: Taking corporate governance to a higher level. Corporate Governance, OECD Publishing. http://dx.doi.org/10.1787/9789264204416-en
[18]	Payne, G. T., & Petrenko, O. V. (2019). Agency theory in business and management research. Oxford Research Encyclopedia of Business and Management, 1–20. Oxford University Press, New York.
[19]	Re Jermyn Street Turkish Baths Ltd., RE [1970] 1 WLR 1 194; revsd. [1971] 3 A11 ER 184.
[20]	Re Legal Cost Negotiation Ltd. (1999) 2 BCLC 171.
[21]	Rusmin. A. (2019, April 23). Five reasons why you should attend annual general meetings if you’re an investor. The Fifth Person. Retrieve from https:// fifthperson.com/5-reasons-why-you-should-attend-annual-general-meetings/
[22]	Sandberg, J. (2011). Changing the world through shareholder activism? Etikk i praksis-Nordic Journal of Applied Ethics, 5(1), 51-78.
[23]	Sarbah, A., Quaye, I., & Affum-Osei, E. (2016). Corporate governance in family businesses: The role of the non-executive and independent directors. Open Journal of Business and Management, 4(1), 14.
[24]	Sattar, S. (2018). Company meetings and impracticability. The Daily Star, March 13. Retrieve from https://www.thedailystar.net/law-our-rights/company-meetings-and-impracticability-1547239
[25]	Shkolnikov, A. (2006). Protecting minority shareholders in emerging markets. A report published by the Center for International Private Enterprise, October 31.
[26]	Siddiqui, M. S. (2013, November 25). Protecting interest of the minority shareholders. The Financial Express, The Financial Newspaper of Bangladesh. Retrieve from http://www.thefinancialexpress-bd.com/ 2013/ 11/25/5614
[27]	Sobhan, F. and Werner, W. (2003). A Comparative analysis of corporate governance in South Asia: Charting a roadmap for Bangladesh. Bangladesh Enterprise Institute, Dhaka, Bangladesh.
[28]	The Companies Act (Bangladesh) 1994. Published in Zahir, M. (2005), “Company and Securities Law”. The University Press Limited, Dhaka, Bangladesh.
[29]	The Companies Act (UK) 2006. Published in French, D. (2007), “Blackstone’s Statutes on Company Law”. Oxford University Press, UK.
[30]	U. S. Securities & Exchange Commission (2007). Audit Committees and Auditor Independence. Retrieve from https://www.sec.gov/info/accountants/audit 042707.htm
[31]	Yasser, Q. R. (2011). Challenges in corporate governance- A family controlled business prospective. International Journal of Innovation, Management and Technology, 2(1), 73.
[32]	Zahir, M. (2005). Company and securities laws (Revised and Updated Edition). The University Press Limited, Dhaka.

Cite This Article

Plain Text BibTeX RIS

APA Style

Suman Dey. (2023). Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. International Journal of Economics, Finance and Management Sciences, 11(5), 273-284. https://doi.org/10.11648/j.ijefm.20231105.17

Copy | Download

ACS Style

Suman Dey. Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. Int. J. Econ. Finance Manag. Sci. 2023, 11(5), 273-284. doi: 10.11648/j.ijefm.20231105.17

Copy | Download

AMA Style

Suman Dey. Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. Int J Econ Finance Manag Sci. 2023;11(5):273-284. doi: 10.11648/j.ijefm.20231105.17

Copy | Download

@article{10.11648/j.ijefm.20231105.17,
  author = {Suman Dey},
  title = {Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {11},
  number = {5},
  pages = {273-284},
  doi = {10.11648/j.ijefm.20231105.17},
  url = {https://doi.org/10.11648/j.ijefm.20231105.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231105.17},
  abstract = {Corporate Governance has recently become an important issue in Bangladesh. The principal characteristics of effective corporate governance are protection of rights and privileges of minority shareholders and transparency of companies. The Companies Act of 1994, which was passed with the protection of minority shareholders as one of its key objectives, has fallen short of providing minorities with the security and remedy they were expecting against oppression. The main objective of the study is to evaluate the rights and privileges of minority shareholders in the family-owned firms on the perception of three major stakeholders of the sample companies. For this purpose, the study has developed a questionnaire based on recent literature survey and gathered the opinions of the executive/non-executive directors, Independent directors and shareholders of sample companies under the framework of 5 point likert scale. The gathered primary data have been analyzed by appropriate number of descriptive and inferential statistics. In examining the state of minority shareholders’ rights and privileges in the sample listed firms, the study takes the perception of the executive/non-executive directors, the independent directors, and the shareholders and finds that they have shown different views from each other, indicating that there are likely irregular/unmethodical practices of the board directors in this respect in the sample firms. In measuring the level of importance on different issues of corporate governance on listed family-owned firms of Bangladesh given by the respondents, the study observed that the groups have a significant difference on minority shareholders’ rights and privileges and an insignificant difference on cumulative voting rights. Finally, the study gives some recommendations for the remedies of minority shareholders.
},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy
AU  - Suman Dey
Y1  - 2023/10/31
PY  - 2023
N1  - https://doi.org/10.11648/j.ijefm.20231105.17
DO  - 10.11648/j.ijefm.20231105.17
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 273
EP  - 284
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20231105.17
AB  - Corporate Governance has recently become an important issue in Bangladesh. The principal characteristics of effective corporate governance are protection of rights and privileges of minority shareholders and transparency of companies. The Companies Act of 1994, which was passed with the protection of minority shareholders as one of its key objectives, has fallen short of providing minorities with the security and remedy they were expecting against oppression. The main objective of the study is to evaluate the rights and privileges of minority shareholders in the family-owned firms on the perception of three major stakeholders of the sample companies. For this purpose, the study has developed a questionnaire based on recent literature survey and gathered the opinions of the executive/non-executive directors, Independent directors and shareholders of sample companies under the framework of 5 point likert scale. The gathered primary data have been analyzed by appropriate number of descriptive and inferential statistics. In examining the state of minority shareholders’ rights and privileges in the sample listed firms, the study takes the perception of the executive/non-executive directors, the independent directors, and the shareholders and finds that they have shown different views from each other, indicating that there are likely irregular/unmethodical practices of the board directors in this respect in the sample firms. In measuring the level of importance on different issues of corporate governance on listed family-owned firms of Bangladesh given by the respondents, the study observed that the groups have a significant difference on minority shareholders’ rights and privileges and an insignificant difference on cumulative voting rights. Finally, the study gives some recommendations for the remedies of minority shareholders.

VL  - 11
IS  - 5
ER  -

Copy | Download

Author Information

Suman Dey

Department of Humanities, Chittagong University of Engineering & Technology (CUET), Chattogram, Bangladesh

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Suman Dey. (2023). Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. International Journal of Economics, Finance and Management Sciences, 11(5), 273-284. https://doi.org/10.11648/j.ijefm.20231105.17

Copy | Download

ACS Style

Suman Dey. Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. Int. J. Econ. Finance Manag. Sci. 2023, 11(5), 273-284. doi: 10.11648/j.ijefm.20231105.17

Copy | Download

AMA Style

Suman Dey. Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy. Int J Econ Finance Manag Sci. 2023;11(5):273-284. doi: 10.11648/j.ijefm.20231105.17

Copy | Download

@article{10.11648/j.ijefm.20231105.17,
  author = {Suman Dey},
  title = {Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {11},
  number = {5},
  pages = {273-284},
  doi = {10.11648/j.ijefm.20231105.17},
  url = {https://doi.org/10.11648/j.ijefm.20231105.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231105.17},
  abstract = {Corporate Governance has recently become an important issue in Bangladesh. The principal characteristics of effective corporate governance are protection of rights and privileges of minority shareholders and transparency of companies. The Companies Act of 1994, which was passed with the protection of minority shareholders as one of its key objectives, has fallen short of providing minorities with the security and remedy they were expecting against oppression. The main objective of the study is to evaluate the rights and privileges of minority shareholders in the family-owned firms on the perception of three major stakeholders of the sample companies. For this purpose, the study has developed a questionnaire based on recent literature survey and gathered the opinions of the executive/non-executive directors, Independent directors and shareholders of sample companies under the framework of 5 point likert scale. The gathered primary data have been analyzed by appropriate number of descriptive and inferential statistics. In examining the state of minority shareholders’ rights and privileges in the sample listed firms, the study takes the perception of the executive/non-executive directors, the independent directors, and the shareholders and finds that they have shown different views from each other, indicating that there are likely irregular/unmethodical practices of the board directors in this respect in the sample firms. In measuring the level of importance on different issues of corporate governance on listed family-owned firms of Bangladesh given by the respondents, the study observed that the groups have a significant difference on minority shareholders’ rights and privileges and an insignificant difference on cumulative voting rights. Finally, the study gives some recommendations for the remedies of minority shareholders.
},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - Corporate Governance & Rights and Privileges of Minority Shareholders of Family-Owned Firms: Evidence from the Emerging Economy
AU  - Suman Dey
Y1  - 2023/10/31
PY  - 2023
N1  - https://doi.org/10.11648/j.ijefm.20231105.17
DO  - 10.11648/j.ijefm.20231105.17
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 273
EP  - 284
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20231105.17
AB  - Corporate Governance has recently become an important issue in Bangladesh. The principal characteristics of effective corporate governance are protection of rights and privileges of minority shareholders and transparency of companies. The Companies Act of 1994, which was passed with the protection of minority shareholders as one of its key objectives, has fallen short of providing minorities with the security and remedy they were expecting against oppression. The main objective of the study is to evaluate the rights and privileges of minority shareholders in the family-owned firms on the perception of three major stakeholders of the sample companies. For this purpose, the study has developed a questionnaire based on recent literature survey and gathered the opinions of the executive/non-executive directors, Independent directors and shareholders of sample companies under the framework of 5 point likert scale. The gathered primary data have been analyzed by appropriate number of descriptive and inferential statistics. In examining the state of minority shareholders’ rights and privileges in the sample listed firms, the study takes the perception of the executive/non-executive directors, the independent directors, and the shareholders and finds that they have shown different views from each other, indicating that there are likely irregular/unmethodical practices of the board directors in this respect in the sample firms. In measuring the level of importance on different issues of corporate governance on listed family-owned firms of Bangladesh given by the respondents, the study observed that the groups have a significant difference on minority shareholders’ rights and privileges and an insignificant difference on cumulative voting rights. Finally, the study gives some recommendations for the remedies of minority shareholders.

VL  - 11
IS  - 5
ER  -

Copy | Download