Ownership V control: fault lines in directors shareholders relationship: a special reference to Malaysian family business
In an ideal corporate management structure, directors should act in the best interest of the shareholders. In doing so, the directors' actions are governed by certain legislation which specifies their duties and this legislation is also relevant to the shareholders with respect to their rig...
| Main Authors: | , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
2009
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/23694/ http://irep.iium.edu.my/23694/ http://irep.iium.edu.my/23694/1/OWNERSHIP_V_CONTROL.pdf |
| Summary: | In an ideal corporate management structure, directors should act in
the best interest of the shareholders. In doing so, the directors' actions
are governed by certain legislation which specifies their duties and
this legislation is also relevant to the shareholders with respect to
their rights. Although there are legislations which govern the
relationship between directors and shareholders, there are still latent
problems. These hidden problems could be regarded as fault lines in
the relationship of these two parties. In a family business structure,
these fault lines could bring worse effect compared to “non-family”
companies as the directors are dealings with shareholders who are
also family members. Another arising scenario which could arise is
where directors are not part of the family members but have to deal
with shareholders/members who are related to the owner of the
company. This paper intends to highlight the fault lines which could
occur between directors and shareholder in family owned companies.
The main term of reference of this paper is the corporate governance
principles and practices. This paper also aims to propose some
mechanisms, through legislations in which problems which arise from
the fault lines could be reduce if not resolved. |
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