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Media Report on Scandals in the Corporate World

Added on -2019-09-20

| 10 pages
| 1514 words

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[TYPE THE COMPANY NAME]Derivative Suitprotection of minority shareholders
Introduction to the StudyIn today’s world with the high focused media reports on the scandalsprevailing in the corporate world, links the financial crises to the negligibleprotection forwarded to the minority shareholders. The studies linked to thistopic of lesser protection to the minority shareholders suggests that themajority shareholder have the tendency to expropriated minorityshareholder, and in so doing makes the maximum benefit out of it.1Theprotection of minority shareholders is important because, the growth in theeconomy gets stimulated by this and also the agency costs of the firm getsreduced which benefits the firm as a whole, thereby resulting in the efficientmanagement of the firm. Furthermore, the protection of the minorityshareholders helps in the cross listing which is listing stock with the foreignstock exchange and also trading in the very nation where the company isincorporated.2The OECD set principlesfor countries to develop corporate governancefor achieving minimum standards for the protections and Fairness, Responsibility, Transparency, Accountability are the major pillars of corporate governance. To achieve the standard of fairness, the shareholder’srights must be safeguarded by the laws and the regulations. In order to incorporate responsibility, compliance to the operating laws is essential and transparency is achieved providing the accurate information relating to the performance of the company to its shareholders. Lastly, the accountability is 1[CITATION BIR07 \l 1033 ]2[CITATION SMA08 \l 1033 ]2

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