Large Shareholders, Board Independence, and Minority Shareholder Rights: Evidence from Europe

This research investigates recent international reforms of minority shareholder rights (MSRs), and the relationship between those reforms and national legal systems. No previous studies have investigated such changes and their underlying causes; nor have they viewed the phenomena concerned through a dynamic lens. The study uses secondary data from 142 countries over a five-year period (2006-2010). Using growth curve modelling and the panel data method, the study finds that legal systems and law enforcement affect reforms positively. On average, countries’ MSRs are improving, but this is not consistent across nations. The findings contribute to the current debate on the relationship of law to minority shareholder protection and will assist policy-makers in the area of investor protection reforms. Future research directions are suggested at the end of the paper.

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Board independence and firm performance: evidence from Kuwait

International Journal of Law and Management ◽

10.1108/ijlma-06-2019-0145 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Mejbel Al-Saidi

Keyword(s):

Firm Performance ◽

Least Square ◽

Independent Directors ◽

Board Independence ◽

Content Type ◽

Listed Firms ◽

Ordinary Least Square ◽

Large Shareholders ◽

The Relationship

Purpose This paper aims to reduce the knowledge gap by using a large sample and different regressions while controlling the endogeneity and causality issues. Design/methodology/approach This study used the ordinary least square (OLS) and two stage least squares (2SLS) regressions to control the endogeneity and causality problems; this estimation strategy allows for comparison of both estimates to identify any inconsistency and biases in the parameters. Findings General speaking, this study found that board independence negatively affected firm performance based on Tobin’s Q only and the relationship between the two variables ran from board independence to firm performance but not vice versa. Originality/value The current independent directors are not adding value to Kuwait’s listed firms. Some directors who represent large shareholders and the conflict between large shareholders and small shareholders could affect the role of independent directors in Kuwait. To best of the researchers’ knowledge, this study is the first to consider board independent after controlling the issues of endogeneity and causality in Kuwait; thus, the results could be useful for Kuwaiti firms, regulators and policymakers.

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