Publication: Minority Shareholders : What Works to Protect Shareholder Rights?
Date
2003-08
ISSN
Published
2003-08
Author(s)
Capaul, Mierta
Abstract
The World Bank's assessments of
corporate governance practices in 25 countries across five
continents have revealed a general commitment to comply with
international principles. But the necessary legal changes
are slow and subject to political compromise. Moreover, most
countries have a poor track record in enforcing existing
laws and regulations. Expropriation of minority shareholders
continues to be a problem around the world. The corporate
governance assessments show that choice can facilitate
reform. Allowing different models of corporate governance to
coexist permits investors with varying risk profiles to
choose the appropriate market and company to invest in and
allows market forces to pick the winners. When companies
have the choice of listing their shares on a stock market
segment with stricter corporate governance rules or of
complying with a code of best practice, they can use this
option to signal to investors that they are different. While
establishing a corporate governance market segment appears
to be an attractive option only for middle-income countries,
codes of best practice seem to be important regardless of a
country's level of development.
Citation
“Capaul, Mierta. 2003. Minority Shareholders : What Works to Protect Shareholder Rights?. Viewpoint: Public Policy for the Private Sector; Note No. 265. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/e6279e72-7d16-513e-9d5c-2217f541290f License: CC BY 3.0 IGO.”
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