Shareholder Meetings Research Articles

Seeing is believing: Do face‐to‐face meetings between independent directors and investors enhance corporate ESG performance?

AbstractThis article explores the topic of whether face‐to‐face communication between independent directors and investors can help them obtain firm‐specific information and promote management to improve corporate environmental, social, and governance (ESG) performance. Our findings revealed a notable positive correlation between the frequency of independent directors attending shareholder meetings (IDASM) and ESG performance. The underlying mechanism for this correlation is that IDASM increases investment in research and development (R&D) and green patent applications, which can drive long‐term firm value. Further analysis reveals that independent directors attending annual shareholder meetings can more effectively enhance a company's ESG performance. Independent directors attending shareholder meetings also exhibits a more noticeable impact on improving corporate governance performance than environment performance and social performance. The effect becomes more pronounced when independent directors possess an accounting background, have shorter tenures, when the meetings attended by more minority shareholders, the degree of enterprise information asymmetry is high. The research results have reference significance for improve the information disadvantage position of independent directors, restrain short‐sighted behavior of management, and improving the role of shareholder meetings in protecting investor interests.

LITERATUR REVIEW: SUATU TINJAUAN FUNGSI AUDIT INTERNAL TERHADAP TATA KELOLA PERUSAHAAN

Along with increasingly rapid economic development, the role of internal audit in companies is becoming increasingly important, especially for corporate governance. The trend of globalization is intensifying, and trade between countries is increasingly dense. This brings economic benefits to the company while increasing risks. In order to survive and thrive, companies must face more challenges. On the one hand, enterprises should increase investment in internal governance management, and establish institutions such as shareholder meetings, boards of directors, manager levels and supervisory boards, and gradually standardize corporate governance structures. On the other hand, strengthening the company's internal audit can not only improve the company's operational conditions, but also discover problems within the company in a timely manner and control them effectively. However, compared to other developed countries in Indonesia, the internal audit system was established too late, so these units have different experiences in learning from abroad, thus causing many problems in establishing internal audit institutions in Indonesia, and many companies do not do so. pay attention to internal audits. The purpose of this research is to provide an overview of the relationship between the internal audit function and corporate governance in companies.

Director and shareholder interactions at shareholder meetings: Compromising accountability in the service of colonialism

This research explores director and shareholder two-way face-to-face interactions at the shareholder meetings of Cecil Rhodes’s British South Africa Company, as reflected in verbatim minutes of those meetings. Shareholder meetings are traditionally viewed as being for accountability. Alternatively, directors may engage in manipulative game-playing through skillful political maneuvering of shareholders, thereby compromising accountability. The research analyzes unique data, comprising 25 full sets of verbatim meeting minutes of 29 shareholder meetings over the period 1895–1925, using manual close-reading interpretive content analysis. Our unit of analysis is the interactions between directors and supportive/approving and dissenting shareholders. Our research question is how did the directors and shareholders interact at the shareholder meetings. We develop a typology of 16 types of interactions the directors and shareholders used in their exchanges. We complement our analysis with illustrations of types of interactions extracted from our verbatim minutes. We demonstrate how powerful directors mobilized supportive/approving shareholders to quash the dissenting shareholders’ voices. Our findings have implications for how modern-day shareholder meetings are conducted.

Involvement of Notaries Who Commit Unlawful Acts in Making Deeds of General Meeting of Shareholders and Its Legal Consequences (Case Study of Supreme Court Decision Number 2826 K/Pdt/2021)

Involvement of Notaries Who Commit Unlawful Acts in Making Deeds of General Meeting of Shareholders and Its Legal Consequences (Case Study of Supreme Court Decision Number 2826 K/Pdt/2021)

PROTECTION OF MINORITY SHAREHOLDERS FROM FRAUD IN LIMITED LIABILITY COMPANY DIVIDEND DISTRIBUTION

<p>This research investigates the potential fraudulent actions carried out by majority shareholders and other corporate organs in the context of stock distribution. The primary focus is on the continuity of practices that may disadvantage minority shareholders and undermine the legal protections they should receive. Majority shareholders, often wielding significant influence in the General Meeting of Shareholders (RUPS), may exploit their power to manipulate decisions related to stock distribution. The presence of a quorum that can be achieved without the participation of minority shareholders increases the risk of fraud in this process. The aim of this research is to identify various fraudulent actions that may occur in stock distribution by majority shareholders and related corporate organs. Using a legal analysis approach and case studies, this research also explores ways in which minority shareholders might prevent or respond to fraudulent actions. Furthermore, the research examines the extent to which Law No. 40 of 2007 concerning Limited Liability Companies (UU PT) provides a legal basis to prevent and respond to fraudulent actions in stock distribution. Practical implications of potential fraud are analyzed to provide recommendations that can strengthen legal protections for minority shareholders. This research is expected to contribute to a deeper understanding of the dynamics of fraud in stock distribution, outline the legal challenges faced by minority shareholders, and formulate concrete steps to prevent and respond to such fraud in companies.<em></em></p>

Protection of Minority Shareholders on Decisions of the General Meeting of Shareholders of Public Company in the Form of a Bank

Protection of Minority Shareholders on Decisions of the General Meeting of Shareholders of Public Company in the Form of a Bank

Validity of the Deed of the General Meeting of Shareholders regarding the Dismissal of Directors Without Notice and Absence

Validity of the Deed of the General Meeting of Shareholders regarding the Dismissal of Directors Without Notice and Absence

CEO industry tournament, investor attention, and company value

AbstractBased on the emerging capital market of China, this paper uses the data of Chinese listed companies to test the market value management behavior of CEOs under the incentive of industry tournaments. The empirical results show that the CEOs industry tournament improves the value of listed companies by attracting investor attention. In the test of the incentive mechanism of the industry tournament, we find that in the samples with lower industry mobility and state ownership and where the CEO is new, retiring, or a founder, the industry pay gap has a weaker incentive effect on the CEO. In the test of the CEOs' efforts to manage investor attention, this paper finds that CEOs are incentivized to disclose more financial and nonfinancial information, increase advertising spending, and hold more shareholder meetings. Discussed with other incentives, compensation incentives and equity incentives enhance the motivational role of industry championships for CEOs. This study explores in depth the possible impact of industry tournaments on CEO behavioral decisions and also provides a new perspective for corporate to manage investor attention. This provides important reference value for corporate CEO compensation, information disclosure supervision, and investor decision‐making.

Pembuatan Akta Melalui Telekonferensi: Sebuah Hukum Cyber Notary

This research aims to examine electronic signature arrangements in electronic general meetings of shareholders. and to find out about the proof of the electronically signed deed of the minutes of the general meeting of shareholders. The research was carried out using normative research methods using a statutory approach and a conceptual approach. Analysis of legal materials uses descriptive analysis which is used to solve problems regarding the legal issues to be researched. The research results show that regulations regarding electronic signatures are contained in Article 1 number 12 of the ITE Law which explains that every electronic signature contains verified electronic information in it. And Article 11 of the ITE Law explains that electronic signatures must have legal force and legal consequences that fulfill the requirements stated in that article. And when using an electronic signature, it must be registered and certified so that legal certainty is guaranteed. Regarding the strength of the evidence, this is still doubtful because in the UUJN itself there is no specific regulation regarding the preparation of deeds carried out electronically. In implementing the GMS, the GMS minutes deed use the legal principle of lex specialis derogate legi generali. Lex generalis is Article 16 Paragraph (1) letter m, and lex specialis is the provisions of Article 77 Paragraph (4) UUPT. The legal validity of the deed of the GMS Minutes held via teleconference media still has legal force as an authentic deed and can be used as evidence in court if there are problems in the future.

Do large registered investment funds undermine shareholder activism? Evidence from hedge fund proposals

We examine the voting behavior of Registered Investment Funds (Mutual Funds, ETFs and Close-end Funds) on Hedge Funds proposals, a common vehicle of value-driven shareholder activism. We compare the support rates of Registered Funds versus other voting shareholders on different types of proposals set up for voting at shareholders meetings and explore fund-level characteristics that may explain the variation in support rates. Our results show that Registered Funds support rates on Hedge Fund proposals vary depending on the proposal category. In general, the support rates of Registered Funds are about 4 percentage points lower compared to other investors. However, that difference rises to 10 p.p. for proposals that are more confrontational to the incumbent management of the target company. Interestingly, the average lower support rates of Registered Funds are driven by the ten largest funds. On the contrary, Registered Funds from smaller parent groups tend to be more supportive of Hedge Fund activism. We document a 18 p.p. reduction in the probability of favorable votes on Hedge Fund proposals by the largest Registered Funds compared to smaller funds. Our results suggest that the growing ownership in public companies by large Registered Funds reduces the overall support of shareholder activism through Hedge Fund proposals.

Analysis Concept of Independence of the Sharia Supervisory Board in the Sharia Banking

The Sharia Supervisory Board is obliged to direct, review, and supervise the activities of financial institutions so that it can be believed that they comply with Islamic sharia rules and principles, the fatwa of the Sharia Supervisory Board rules binding the Islamic financial institutions. The Shari'ah Supervisory Board has a heavy and strategic task so it takes a high professional to live it. The objectives of this research are: To find out the role of the Sharia Supervisory Board in supervising and handling the issue of Compliance with Islamic principles in Islamic Banking; To find out the obstacles faced by the Sharia Supervisory Board in upholding sharia economic principles in Sharia Banking; and to find out the steps shown by the Sharia Supervisory Board in upholding the principle of Independence in Sharia Banking. This research uses a conceptual approach that explains the concept of the independence of the Sharia Supervisory Board in carrying out sharia supervision activities in sharia banking. The result of this research is that Supervision in Sharia Banking is carried out to ensure the suitability of all bank operations with sharia principles and rules, namely by issuing fatwas, rules, and directives in fiqh issues which are used as guidelines for management in operating Islamic banks. With regard to independence, members of the Sharia Supervisory Board must not be part of the employees of the Islamic bank. Although he was appointed by the General Meeting of Shareholders, however, the matter of approval must come from the National Sharia Board. The Shari'ah Supervisory Board also has a work system and certain tasks as do other oversight bodies. The absence of influence from directors, commissioners and employees in Sharia Banking is able to shake the decision of the Sharia Supervisory Board in assessing fund distribution and internal audit activities in the Sharia compliance report in Sharia Banking.

From apathy to activism: Shareholder dissent on director's pay proposals and board effectiveness

Using a hand-collected dataset of shareholder voting on 10,805 director compensation proposals at general shareholder meetings of Chinese listed firms from 2010 to 2019, we provide novel empirical evidence on board reactions to shareholder dissent. We find that boards of directors facing shareholder dissent significantly improve their monitoring and advising effectiveness. Specifically, they reduce the likelihood of financial restatements, improve CEO performance-turnover sensitivity, and improve corporate investment efficiency. Our findings are robust to propensity score matching, instrumental variable estimation and the exogenous shock of mandatory online voting. Moreover, independent directors facing dissent are more likely to vote against board proposals and to reduce their absences from board meetings. The mechanism analysis shows that shareholder dissent operates through the reputation concern and market signal channels. The effect of dissent is more prominent for non-SOEs, for firms with more high-profile directors, and for firms with less powerful CEOs. Besides, the improved board effectiveness induced by shareholder dissent leads to better firm performance. Overall, our findings highlight the role of shareholder voting in emerging markets with concentrated ownership and weak investor protection.

TANGGUNG JAWAB DIREKSI TERHADAP PEMEGANG SAHAM ATAS PELANGGARAN PRINSIP KETERBUKAAN INFORMASI DI PASAR MODAL.

This study examines the responsibilities held by the board of Directors of the company to shareholders in the context of violations of the principle of disclosure of information in the capital market. With a focus on the dynamics of the relationship between the board of directors and shareholders, this study analyzes the impact of violations of the principle of disclosure of information on shareholder confidence and the value of the company. The results of the study are expected to provide insight into the role of the board of directors in ensuring proper information disclosure, as well as highlighting relevant legal and regulatory aspects in maintaining the integrity of the capital market. This study uses the type of normative juridical research by analyzing legal materials sourced from legislation and realized with various references from literature review. The results of this study that in the context of Capital Markets, companies that go public get additional capital from the public stock buyers. Previously, shares were only owned by a certain number of people such as family, relatives, and friends. However, by going public, shares are issued and sold to the general public, creating independent shareholders whose motivation is more on making a profit. The principle of disclosure becomes important, realized through the preparation of a prospectus that must contain all the details and material facts, made clear, and accountable to the board of directors. Violation of the principle of openness by the board of Directors may result in sanctions, such as reprimand or dismissal from office, in accordance with Law No. 40 of 2007. At the General Meeting of shareholders (GMS), the board of directors must account for their actions, and the legal consequences may include dismissal and civil or criminal liability. This principle affirms the importance of integrity in maintaining transparency and trust in the capital market.

Exit as governance: The effect of stock liquidity on firm productivity

AbstractThis study examines the effect of stock liquidity on firm productivity. Our findings indicate that stock liquidity positively affects firm productivity. Our study provides several pieces of evidence to show that stock liquidity enhances firm productivity through facilitation of corporate governance by shareholders and stock price efficiency. Additionally, we confirm that the impact of stock liquidity on productivity is more pronounced for firms with lower attendance at shareholder meetings, with less financial constraints and that are state‐owned enterprises. This study makes a valuable contribution to the existing literature by presenting novel evidence regarding the influence of stock liquidity on firm productivity in emerging markets.

Pengaruh Penerapan Asean Corporate Governance Scorecard Terhadap Profitabilitas Perusahaan Terbuka Indonesia Tahun 2021

This research aims to determine empirical evidence of the effect of implementing ACGS on company profitability. The independent variables used are the Rights of Shareholders, Equitable Treatment of Shareholders, Role of Shareholders, Disclosure and Transparency, and Responsibilities of the Board. ACGS measurements are based on a measurement method used using a purposive sampling method with a sample of public companies that implement ACGS in Indonesia and then measured by the criteria regulated by the ACMF. Data comes from ACGS reports and annual reports. The results of this research state that the rights of shareholders have a positive effect because the company can protect the rights of shareholders in participating effectively in general meetings of shareholders. Furthermore, the equitable treatment of shareholders, the role of shareholders, disclosure and transparency, and responsiveness of the board do not have a significant effect on the company.

Director's Accountability for the Company's Sales Results and Commissioner's Actions in Asset Recovery

This study examines directors’ accountability for company sales results and commissioners’ actions in asset recovery regarding an embezzlement case involving Conti Chandra, a Director at PT. Bangun Mega Semesta (BMS) in Hotel Batam City Condotel (BCC). Relevant court decisions include Supreme Court Decision No. 567K/PID/2016, Pekanbaru High Court Decision No. 212/Pid.B/2015, and Batam District Court Decision No. 321/Pid.B/2015. It focuses on two main issues: corporate managers’ accountability based on Law No. 40 of 2007 on limited liability companies and criminal liability for “embezzlement crime in position” within a limited liability company. The study uses a normative legal research method with a descriptive approach, relying on secondary data and qualitative analysis. Findings indicate corporate managers’ accountability during general meetings of shareholders. Criminal liability for embezzlement relates to directors’ fiduciary duty to shareholders, requiring prudence, responsibility, and good faith. Two recommendations are proposed: First, The Indonesian government should revise the limited liability company law on holding directors and commissioners accountable for neglecting management and supervision duties and emphasizing fiduciary duty. Second, the Directors of Batam City Condotel should adhere to fiduciary duty principles under the board of commissioners’ supervision.
 Keywords: commissioners actions, directors, embezzlement

Neue Gesellschaftsform für Startups in Bulgarien – die Gesellschaft mit wechselndem Kapital

As of 1 August 2023, Bulgarian law provides for a new legal form to organise legal entities: the company with variable capital. This legal form is intended to allow modern companies in the IT sector to enter the market without requiring large amounts of capital or administrative resources. A major advantage of the new company form for founders is that shareholds have wide discretion in designing the articles of association. In particular, different classes of shares can be created, such as shares with disproportionate voting rights or with a right to a disproportionate share of profits. The new regulation also provides for simplifications in corporate governance, and the possibility of digital general shareholder meetings. The commercial register is scheduled to be technically capable of registering companies with variable capital from mid-2024.

Partisan Politics and Annual Shareholder Meeting Formats

Partisan Politics and Annual Shareholder Meeting Formats

EMPLOYEES' LEGAL STATUS APPOINTED AS DIRECTORS THROUGH RUPS

Supreme Court Circular No. 1/2022 stipulates that employees or laborers are appointed directors in the same company through a General Meeting of Shareholders (RUPS) where the employment relationship with the company ends upon appointment as a director. This research aims to ascertain how the severance compensation components and their calculation are entitled to be received by employees appointed as directors through RUPS. This study employs the IRAC writing model, a legal writing technique with the structure of Issue, Rule, Application, and Conclusion. The research findings reveal that Government Regulation No. 35/2021 does not include provisions regarding severance compensation due to the reason of being appointed as a director, leading to a legal vacuum. It creates two possibilities in practice. On the one hand, in cases where an employee resigns from their position to subsequently be appointed as a director, the calculation of compensation for the resignation is applied. On the other hand, companies can establish an internal policy governing severance and compensation calculation mechanisms for employees appointed as directors following best practices. The compensation calculation should consider that it is more than x0.5 because there is no loss or breach, but not exceeding x1.75. After all, the employee does not retire, and the termination of the employment relationship does not result in a complete separation, as the employee continues to work and receives income and benefits from the same company.

Decisions of the General Meeting of Shareholders in a Limited Liability Company, Legislative and Doctrinal Aspects

The decisions of general meetings embody the social will, which is forged in the course of debates through the joint, collegial effort of the participating members, driven by a unitary interest of the limited liability company. The resolutions of general meetings have therefore been described as collective legal acts, the manifestation of a collective will, which incorporates the individual wills of the members who participate together in its conclusion and which is formed on the basis of the majority principle, according to which the majority signifies the will of society, governed by a general interest, which justifies the sacrifice of the minority of members. This is also the reason why resolutions are binding on members who did not attend the general meeting or who voted against the majority decision and asked for it to be included in the minutes of the meeting, provided that they were validly adopted.