More say by minority shareholders does not always mean better decisions

Due either to weak investor protection or legitimate business reasons, ownership of publicly listed companies in many markets - Argentina, Greece, Italy, Hong Kong, Singapore, Japan and mainland China, for example - is highly concentrated in the hands of one or a few controlling shareholders.

Because controlling shareholders typically have control power over firms significantly in excess of their cash flow rights, primarily through the use of pyramids and participation in management, they have a direct conflict of interest with minority shareholders.

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A version of this article appeared in the print edition of The Sunday Times on April 29, 2018, with the headline 'More say by minority shareholders does not always mean better decisions'. Print Edition | Subscribe