Interests Of Shareholders Research Articles

A Study on the Relationship between Family Shareholding and Company’s Operating Performance - Evidences from a Small Open Economy

Our study is to investigate how the ownership structure and financial aspects of family-controlled firms influence their operating performance. The interests of major shareholders are aligned, this could positively impact the company's operating performance. Conversely, dominant shareholders might entrench themselves in a way that doesn't necessarily benefit the operating performance. The presence of a second largest shareholder acts as a check and balance on the first largest shareholder. We reveal an inverted U-shaped relationship between the shareholding ratio of foreign institutional investors (SRFII) and operating performance. It suggests that as SRFII increases, operating performance initially improves but might decline after reaching a certain threshold. This finding highlights the importance of maintaining balance in SRFII to ensure alignment of interests between company leadership and the company's overall goals. Excessive foreign ownership could potentially lead to divergent interests that may not be aligned with the company's best interests. We also find that higher equity pledge ratio among key leadership roles might adversely affect operating performance. Pledged shares could restrict decision-making flexibility and potentially lead to conflicts of interest. These findings shed light on the complex dynamics within family-controlled firms, particularly how ownership structure and financial arrangements could influence operational outcomes.

Diversification Strategies and Financial Performance. A case of Banque Populaire du Rwanda Headquarters

This research investigated the impact of diversification on organizational performance at Banque Populaire du Rwanda (BPR). The study aimed to assess how channel and product diversifications affect BPR’s financial performance. Using a descriptive research design, the researcher focused on a population of 45 individuals, employing a census sampling technique to include all participants. Both qualitative and quantitative methods were utilized, with self-administered questionnaires as the primary data collection tool, supplemented by content analysis for validation. Data analysis included descriptive statistics, correlation, and regression, with findings presented in tables. Results showed that 77.8% of respondents strongly agreed that BPR products targeting the diaspora contribute to high profits, while 91.1% noted that financial security enhances competitive advantage. Additionally, 82.2% agreed that electronic banking improves customer satisfaction. The study also examined the return on equity (ROE) from 2019 to 2022, with ratios of 25.7%, 7.97%, 12.16%, and 18.56%, indicating shareholder interest in financial performance. The correlation analysis revealed a strong positive relationship (r = 0.894, p < 0.01) between diversification strategies and BPR’s performance, confirming the hypothesis. In conclusion, BPR should implement robust measures to enhance diversification strategies to improve performance, and financial institutions should prioritize effective management procedures to support these initiatives.

The mediating role of financial reporting aggressiveness in corporate tax avoidance strategies

Tax avoidance, often driven by managerial discretion, remains a critical issue in corporate governance due to its implications for financial transparency and regulatory compliance. This study investigates how Transfer Pricing, Thin Capitalization, Leverage, and CSR Disclosure – strategies employed by managers – affect Tax Avoidance and examines the mediating role of Financial Reporting Aggressiveness. Grounded in agency theory, the study analyzes data from 20 firms listed on the Indonesian Stock Exchange from 2019 to 2023 using PLS-SEM. The findings reveal that Transfer Pricing (β = 0.062, p = 0.002), Leverage (β = 0.046, p < 0.001), and CSR Disclosure (β = 0.061, p < 0.001) significantly increase Tax Avoidance, with Financial Reporting Aggressiveness acting as a mediator. However, Thin Capitalization does not significantly influence Tax Avoidance (β = 0.028, p = 0.422). These results suggest that managers exploit these mechanisms to minimize tax burdens, often at the cost of long-term shareholder interests. The study calls for stronger corporate governance and stricter oversight of CSR reporting and financial transparency to mitigate such practices.

The Relationship Between Social Attention and the Risk of Stock Price Collapse of Enterprises: Perspective from Baidu Tieba

With the rapid progress of the world economy, the problem of stock price collapse has become a major threat to the stable development of stock markets in various industries. Based on Baidu Tieba, this paper collects the stock price data of each listed company in the CSMAR database as the dependent variable NCSKEW_Mdeq, the total posts, total users and average repost number as the independent variables. Use Stata to conduct regression analysis on the two. As a result, it was found a significant negative link between Total Posts and Total Users and the dependent variable NCSKEW_Mdeq and there was no statistically significant link between Avg Repost Num and the dependent variable. This study provides a brand-new perspective for reducing the risk of stock price collapse in enterprises, aiming to explore and analyze the key factors that affect the stability of corporate stock prices, and thus provide clear direction and strong theoretical support for future research on protecting the interests of shareholders.

Debt maturity and the marginal value of cash holdings

This study investigates the impact of debt maturity on the marginal value of cash holdings. It posits that short-term debt acts as a crucial governance mechanism by reducing agency conflicts and aligning managerial actions with shareholder interests. Using a sample of U.S. public firms, the results indicate that firms with higher proportions of short-term debt have a greater marginal value of cash, reflecting more efficient resource allocation and reduced managerial opportunism. The necessity for frequent capital market interactions associated with short-term debt mitigates agency conflicts. Additionally, the study explores three potential mechanisms: financial constraints, managerial moral hazard, and information asymmetry.

Relationship Between IPO and Company Development Based on the Case of Poten Enviro

Abstract: The stock market crash in early 2024 in China has sparked criticism from investors regarding the current Chinese IPO system. There has been extensive debate on whether IPOs should serve as a venue for financing for companies facing internal and external development difficulties and questionable profitability, and whether the interests of shareholders should receive better protection. To delve deeper into the issues surrounding the Chinese IPO system, a listed companyPoten Envirohas been selected, and a comprehensive review has been conducted on its development history, internal and external challenges, IPO process, financial irregularities, and other related behaviors. The company should proper analyze the external environmental changes, and the IPO should not be pursued blindly. Also, the regulation institution should strengthen supervision of listed companies to avoid losses for the public. This study will be beneficial in providing insights for the reform of the Chinese stock market and offering guidance for strategic decision-making by enterprises.

Family Enterprises and Minority Shareholders: Benefits and Risks in Corporate Governance

This essay mainly studies the benefits of minority shareholders in family businesses. Through the Secondary research method to investigate the relevant data of countries worldwide, it is found that family businesses dominate the global business and make significant contributions to employment and GDP growth. Moreover, family enterprises attach importance to brand inheritance and the long-term development of the company. Their good brand image and endurance in difficulties have increased the overall revenue of the company, thus benefiting minority shareholders to a certain extent. Nevertheless, this essay points out that there is a unique "agency issue" in family enterprises and demonstrates that this issue will damage the interests of minority shareholders through the case of Samsung. Furthermore, this essay finds that family infighting is more likely to occur in older family businesses, which brings a new research dimension to family business governance.

The Relationship Between Chief Financial Officer Gender and Investment Efficiency

Objective: This study aims to examine the relationship between the gender of the chief financial officer (CFO) and the efficiency of corporate investment, especially over-investment. Methods: The independent variable is the gender of the CFO and the dependent variable is over-investment. The research method is correlation type and multivariate regression using panel data with a logistic regression model approach. The data of manufacturing companies in the Tehran Stock Exchange has been collected from 2017 to 2021. Results: The findings of the research show that the presence of a female financial manager is significantly related to the reduction of the company's over-investment level, so gender plays a role in the economic decision-making and investment of companies. Conclusion: Female chief financial managers are more risk-averse compared to male chief financial managers and consider the interests of shareholders in the company’s economic decisions. Therefore, companies should pay special attention to gender diversity at the level of company managers in making decisions and economic investments.

The relationship between sustainability and financial performance of South African companies

Orientation: Environmental, social and governance (ESG) performance remains crucial information required by stakeholders as they are interested in monitoring whether companies contribute to sustainability or not.Research purpose: The study’s purpose was to determine how the sample companies scored on the three pillars of ESG performance and to determine the relationship between ESG scores and the financial performance of selected South African listed companies, with special reference to the impact of coronavirus disease 2019 (COVID-19) on that relationship.Motivation for the study: Because of crises such as the COVID-19 pandemic, companies tend to focus on their ESG-impact, resulting in them investing in sustainable operations.Research approach/design and method: Linear mixed-effect regression analysis models were developed to determine the relationship between ESG scores and financial performance. The sample consisted of 104 companies listed on the Johannesburg Stock Exchange (JSE) from 2017 to 2022.Main findings: We found that companies do not equitably score on the ESG performance pillars. We also found the following significant relationships: (1) Return on equity (ROE) positively impacts governance performance, (2) ESG positively impacts Tobin’s Q and (3) governance performance positively impacts ROE. Furthermore, the results show that sustainability and financial performance before and after COVID-19 are mainly not meaningful.Practical/managerial implications: New insights are revealed in the interests of shareholders, potential investors and company management regarding how to interpret the relationship between ESG pillars and financial ratios.Contribution/value-add: We contribute to the theory as a conceptual framework was developed to interpret the results within the shareholder’s theory.

Corporate Social Responsibility, Earnings Management, and Cash Holding: A Study of Non-Financial Firms in Pakistan

This study investigates the interplay between CSR practices, earning management, and cash holdings in Pakistani publicly listed companies (PLCs). Spanning the period from 2013 to 2022, the research aims to provide empirical insights into how CSR initiatives influence financial practices within the Pakistani context. Methodologically, the study employs panel unit root tests and compares Ordinary Least Squares (OLS), fixed effects, and random effects models to analyze a sample of 202 non-financial firms listed on the Pakistan Stock Exchange. The implications of these findings underscore the importance of strategic CSR integration to enhance financial transparency, mitigate agency conflicts, and foster sustainable corporate growth. Managerial implications suggest that executives should focus on enhancing board effectiveness, strengthening audit oversight, aligning managerial incentives with long-term shareholder interests, and integrating CSR initiatives into core business strategies. However, the study acknowledges several limitations. These include the sector-specific focus on non-financial firms, which may limit generalizability to other sectors within the Pakistani economy. The study's reliance on panel unit root tests and econometric models, while robust, may benefit from alternative methodological approaches and sensitivity analyses. In conclusion, while this study contributes valuable insights into the CSR practices and financial management of Pakistani PLCs, future research should explore longitudinal trends, sector-specific variations, the role of emerging technologies in integration of CSR into corporate strategies. Addressing these areas would further enhance our understanding and inform policy interventions aimed at promoting transparency, accountability, and sustainable in emerging market economies like Pakistan.

Balancing the interests of shareholders (participants) and members of the Corporation’s management bodies: new challenges and opportunities

The main task of management in a corporation is to ensure a balance of interests of all subjects of corporate relations. An important aspect is the search for legal instruments that will ensure this balance in a certain economic society. Such funds are contained in the current legislation, developed by judicial practice, and can be fixed in the company’s charter. The purpose of the study is to identify the most effective means to ensure a balance of interests of shareholders (participants) and members of management bodies in a business company at the present time. The article also analyzes the legal means that are fixed by the sanctions regulations, and the relevant conclusions are drawn.

Life after Death? Legal Relations of Companies after Cessation of their Legal Existence

The cessation of the legal existence of a company affects many entities that have entered into legal relations with it. Above all, its unsatisfied creditors are affected, but the legal situation of the company's shareholders is also altered. Legislators approach the issue of the cessation of the company's legal existence in different ways and address the problems related to the status of the legal relations of the defunct company differently. The paper presents the two main approaches legislators adopt in this regard in several European jurisdictions (Italy, Poland, the United Kingdom, Germany, France, Spain and Switzerland) and discusses models that exemplify each approach. The study points out the strengths and weaknesses of these approaches and various models, paying particular attention to the way in which the interests of stakeholders and shareholders are balanced and how legal certainty is addressed in each of them. The paper seeks to answer the question of whether it is legitimate to build parallels between the cessation of the legal existence of an individual and a company and to draw on institutions known from succession law when regulating the legal relations of defunct companies. Keywords: Defunct company; Striking off; Legal succession; Liquidation; Creditor’s protection

Governance structure, organizational form, and business performance: A study of the Shanxi piaohao (banks), 1820s–1930s

This paper studies Shanxi piaohao, China’s first and largest private remittance banking group, established by a group of merchants from Shanxi province. Drawing on extensive primary sources, our study offers the first empirical analysis of the piaohao’s business organisation and performance. We show that piaohao thrived but were also constrained by their own private rules. In their earlier development, they successfully overcame the commitment problem by implementing a townsmen-guarantor-based recruitment system, a centralised M-form structure, and a multilateral punishment mechanism. To align the interests of shareholders and employees, they created employment shareholders and offered a competitive compensation scheme. However, piaohao’s governance structure became obsolete as shareholders increasingly failed to monitor head managers in the later period. A drastic increase in business volume and a changing business climate also exposed the defects of a centralised structure. As modern Chinese banks rose to prominence, the piaohao were gradually outcompeted and declined.

The Intervention and Impact of Digital Society on the Governance of Dual Equity Structure in Enterprises

The digital society has become a prominent feature of today's era. Its highly interconnected, transparent, and intelligent characteristics are profoundly changing the governance mode and operational logic of enterprises. This article aims to explore the intervention and impact of digital society on the governance of dual equity structure in enterprises, and provide practical guidance for the sustainable development of enterprises. The dual equity structure, as a special corporate governance model, is characterized by granting different voting rights to different types of shares, achieving absolute control over the company by the management. However, this structure has also sparked many controversies, such as the possibility of management using control to harm shareholder interests, leading to management dictatorship, and so on. In the context of the digital society, enterprises face new challenges and opportunities in terms of information transparency, decision-making efficiency, and governance mechanisms.

Mergers and Acquisitions, CEO Compensation, and Corporate Governance in the Hospitality and Tourism Industry

Drawing on agency theory, we explore the relationship between mergers and acquisitions (M&As) and chief executive officer (CEO) compensation in the hospitality and tourism (HT) industry. Specifically, we investigate whether growth via acquisitions, a popular strategy in the HT industry, is influenced by CEO compensation. Using a sample of HT and non-HT firms for comparison from 1992 to 2019, we find that CEO compensation is significantly higher after acquisitions for both HT and non-HT firms. However, when controlling for common compensation determinants, CEO compensation is significantly higher in HT firms but not in non-HT firms. Surprisingly, in our sample, corporate governance is not significantly related to changes in CEO compensation post-acquisition. In addition, while the fraction of cash-based compensation is negatively related to M&A propensity in both HT and non-HT firms, the fraction of equity-based compensation is unrelated to M&A propensity in HT firms. Our study fills an important gap in the sparse literature on the link between M&A and CEO compensation in the HT industry, providing theoretical implications for future research and managerial implications for boards of directors to design compensation plans that align the interests of managers and shareholders.

Research on the Impact of Equity Pledge on Company Value

This article aims to provide a literature review on the impact of equity pledges on corporate value, and to explore in depth the application of equity pledges as a financial tool in corporate governance and capital operation, as well as its multidimensional impact on corporate value. By reviewing and analyzing relevant literature both domestically and internationally, this article first defines the basic concept of equity pledges and then elaborates on the impact mechanism of equity pledges on company value from both positive and negative perspectives. In terms of positive impact, this article explores how equity pledges can promote corporate financing, optimize capital structure, and enhance the control of major shareholders over the company. In terms of negative impacts, the possible control risk, market risk, and potential damage to the interests of small and medium-sized shareholders brought about by equity pledges were analyzed. Furthermore, this article also discusses the differences in the impact of equity pledges on company value in different scenarios and proposes corresponding policy recommendations and research prospects.

Corporate Governance and Shareholder Value: A Meta-Analysis

Corporate governance is a critical determinant of shareholder value, influencing the effectiveness of management, transparency, and overall corporate performance. This article presents a meta-analysis of existing research on the relationship between corporate governance practices and shareholder value, synthesizing findings from a wide range of studies across different industries and geographical regions. The meta-analysis aims to identify the key governance mechanisms that consistently contribute to enhanced shareholder value, such as board structure, executive compensation, ownership concentration, and regulatory compliance. By analyzing these factors, the study provides a comprehensive overview of how corporate governance frameworks can drive firm performance and protect shareholder interests. The findings highlight that robust corporate governance practices are strongly associated with higher shareholder returns, reduced agency costs, and improved market confidence. Additionally, the study examines the contextual factors, such as legal environments and market maturity, that may influence the effectiveness of governance mechanisms. The article concludes by discussing the implications for policymakers, investors, and corporate leaders, emphasizing the importance of tailoring governance practices to the specific needs and challenges of individual firms. The meta-analysis underscores the value of strong governance structures in achieving sustainable long-term growth and maximizing shareholder value.

Transforming ex-Coal Mining Sites into Sustainable Plantations: A Case Study of Food Natural Sustainability Project in Bomba Group

The Ministry of Agriculture (Kementan) is encouraging efforts to convert former mining land into productive agricultural areas to increase national food production and stocks amidst the global food crisis. Land Reclamation Technology is a necessity to reduce the cost of reclamation of ex-mining land into agricultural land. The method of reclamation of ex-mining land by moving top soil from another place is not recommended because this is a step to solve the problem by creating other new problems. Sustainability Business Model for such rejuvenation projects refer to Collaboration and Community Based and must be prioritize all stakeholders (all parties involved and affected by the activities carried out by the business) rather than the interests of shareholders.

Corporate Viability and the Duty to Consider the Interests of Creditors in the United Kingdom and the European Union

This article contrasts the recent UK Supreme Court case of BTI 2014 LLC v Sequana and the EU Preventive Restructuring Directive, which both examine the duty of directors to consider the interests of the company’s creditors once the company entersfinancial distress. This article firstly contrasts how the two frameworks trigger creditor consideration and what they require of directors. Then it explores how both frameworks utilise the concept of corporate viability either as a framing device for creditor paramountcy or as an independent guide for directorial judgment. The article details how deference towards directorial judgment is facilitated in either framework, particularly in relying on the commercial nature of corporate viability as distinguished from legal insolvency. It also explores how corporate viability positions the interests of different interest holders, namely in how it affects the balance between the interests of shareholders and creditors. The article furthermore explores the extent to which the consideration of broader stakeholders is facilitated by allowing directors to emphasise the importance of corporate viability. Finally, the article explores the broader implications of corporate viability and the creditor duty from the perspective of entity-based theories of corporate form and entity maximisation approaches towards the company’s interests.

Immovable Castles, Movable Companies and the Real Seat Criterion in Troubles (Edil Work, C-276/22)

With Edil Work C-276/22, a decision of 25 April 2024, the Court of Justice of the European Union has solved questions concerning the freedom of establishment of companies incorporated in a certain Member State but operating exclusively in another Member State. The Court holds that the Member State of operation may not require concurrent or exclusive application of its company law, other than in cases where overriding mandatory provisions are at stake, such as for example rules protecting interests of creditors, workers, and minority shareholders.