Skip to main content
SpringerLink
Log in

Shareholder Activism in Malaysia: Exploring a Missing Parameter

  • Conference paper
Proceedings of the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014)

  • 2441 Accesses

Abstract

The topic of shareholder activism has become an important issue for discussion in the corporate world, and debate continues to exist with regard to this matter. In the corporate world, the minority shareholders are the least protected corporate participants, due to their minimal voice in corporate decision-making. This paper is not empirically based but merely conceptual. Therefore, it is aimed at presenting the preliminary work for a study. The concepts of corporate governance, ownership structure and control, shareholder-companies relationship and majority-minority shareholders relationship are discussed, in order to gain an understanding of the concept and some practical perspectives of shareholder activism. From the discussion, several missing parameters of shareholder activism were derived. These missing parameters are considered red flags; there is a dire need to conduct further research for a better understanding of this important topic.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Jensen M (2010) Active investors, LBOs, and the privatization of bankruptcy. J Appl Corp Financ 22(1):77–85

    Article  Google Scholar 

  2. Becht M, Franks J, Mayer C, Rossi S (2008) Returns to shareholder activism: evidence from a clinical study of the Hermes UK focus fund. Rev Financ Stud 22(8):3093–3129

    Article  Google Scholar 

  3. Gantchev N (2013) The costs of shareholder activism: evidence from a sequential decision model. J Financ Econ 107(3):610–631

    Article  Google Scholar 

  4. Huei NS, Ken Y, Kwong LC, Shrives P (2012) Factors influencing the performance of family-controlled publicly-listed firms in Malaysia. Rev Integr Bus Econ Res 1(1):179–206

    Google Scholar 

  5. Shkolnikov A (2006) Protecting minority shareholders in emerging markets. A report published by the Center for International Private Enterprise

    Google Scholar 

  6. Rachagan S (2007) Controlling shareholders and corporate governance in Malaysia: would the self-enforcing model protect minority shareholders? Corp Gov Law Rev 3(1):1–55

    Google Scholar 

  7. Azizan SS, Ameer R (2012) Shareholder activism in family-controlled firms in Malaysia. Manag Audit J 27(8):774–794

    Article  Google Scholar 

  8. Satkunasingam E, Shanmugam B (2006) The consequences of culture on shareholder activism in Malaysia. JAMAR 4(1):45–56

    Google Scholar 

  9. Ameer R, Abdul Rahman R (2009) The impact of minority shareholder watchdog group activism on the performance of targeted firms in Malaysia. Asian Acad Manage J Account Finance 5(1):67–92

    Google Scholar 

  10. Nor Azizah ZA, Halimah A, Nasibah AA (2007) Corporate governance in Malaysia: the effect of corporate reforms and state business relation in Malaysia. Asian Acad Manag J 12(1):23–34

    Google Scholar 

  11. Finance Committee on Corporate Governance (1999) Report on corporate governance. Finance Committee on Corporate Governance, Kuala Lumpur

    Google Scholar 

  12. Cadbury Committee (1992) Report of the committee on the financial aspects of corporate governance. GEC, London

    Google Scholar 

  13. Monks RAG, Minow N (1995) Corporate governance. Blackwell, Oxford

    Google Scholar 

  14. Blair MM (1995) Ownership and control: rethinking corporate governance, for the twenty-first century. The Brooking Institution, Washington, DC

    Google Scholar 

  15. John K, Senbet L (1998) Corporate governance and board effectiveness. J Bank Financ 22:371–403

    Article  Google Scholar 

  16. Watson R (2005) Governance and ownership. Edward Elgar Publishing, Cheltenham

    Google Scholar 

  17. Montgomery CA, Kaufman R (2003) The board’s missing link. Harv Bus Rev 81(3):26–33

    Google Scholar 

  18. Becht M, Bolton P, Roell A (2007) Corporate law and governance. In: Polinsky AM, Shavell S (eds) Handbook of law and economics, vol 2. Elsevier North-Holland, Amsterdam, pp 833–920. doi:10.1016/S1574-0730(07)02012-9

    Google Scholar 

  19. Bebchuk LC, Roe MJ (1999) A theory of path dependence in corporate ownership and governance (1 Oct 1999). Stanford Law Rev 52:127–170; Columbia Law School, Center for Studies in Law & Economics Paper No. 131, November 1999

    Google Scholar 

  20. Pettman J, Lamjav N (2009) The evolution of corporate governance in China: the effects of ownership on Chinese listed companies. M.S thesis, Copenhagen Business School, Denmark

    Google Scholar 

  21. Krishnamurti C, Sevic A, Sevic Z (2006) Legal environment, firm-level corporate governance and expropriation of minority shareholders in Asia. Econ Chang Restruct 38(2005):85–111

    Google Scholar 

  22. La Porta R, Lopez-de-silanes F, Shleifer A (1999) Corporate ownership around the world. J Financ LIV(2):471–517

    Article  Google Scholar 

  23. Belloc F (2013) Law, finance and innovation: the dark side of shareholder protection. Cambridge J Econ 37(4):863–888

    Article  Google Scholar 

  24. Mustafa NH, Abdul Latif R, Taliyang SM (2011) Expropriation of minority shareholders’ rights: evidence from Malaysia. Int J Bus Soc Sci 2(13):215–220

    Google Scholar 

  25. Morck R, Wolfrenzon D, Yeung B (2005) Corporate governance, economic entrenchment, and growth. J Econ Lit XLIII:655–720

    Article  Google Scholar 

  26. Fazilah AS (2002) Ownership structure in the Malaysian corporation sector: its impact on corporate governance, performance, financing and investment patterns. Working paper series, 23, Centre on Regulation and Competition, University of Manchester, Manchester

    Google Scholar 

  27. Aslan H, Kumar P (2012) Strategic ownership structure and the cost of debt. Rev Financ Stud 25(7):2257–2299

    Article  Google Scholar 

  28. Laeven L, Levine R (2007) Complex ownership structures and corporate valuations. Rev Financ Stud 21(2):579–604

    Article  Google Scholar 

  29. Goel S, Mazzola P, Phan PH, Pieper TM, Zachary RK (2012) Strategy, ownership, governance, and socio-psychological perspectives on family businesses from around the world. J Fam Bus Strategy 3(2):54–65

    Article  Google Scholar 

  30. Claessens S, Djankov S, Fan JPH, Lang LHP, Bank W (1999) Expropriation of minority shareholders: evidence from East Asia. World Bank, pp 1–33

    Google Scholar 

  31. Jensen MC, Meckling WH (1976) Theory of the firm: managerial behavior, agency costs and ownership structure. J Financ Econ 3(4):305–360

    Article  Google Scholar 

  32. Hillman AJ, Cannella AA, Paetzold R (2000) The resource dependence role of corporate directors: strategic adaptation of board composition in response to environmental change. J Manag Stud 37(2):235–256

    Article  Google Scholar 

  33. Gillan SL, Starks LT (2007) The evolution of shareholder activism in the united states. J Appl Corp Financ 19(1):55–73

    Article  Google Scholar 

  34. Sjöström E (2008) Shareholder activism for corporate social responsibility: what do we know? Sustain Dev 16(3):141–154

    Article  Google Scholar 

  35. Howton SD, Howton SW, Williams VBM (2008) The ethical implications of ignoring shareholder directives to remove antitakeover provisions. Bus Ethics Q 18(3):321–346

    Article  Google Scholar 

  36. Dalley PJ (2008) Shareholder (and director) fiduciary duties and shareholder activism. Houst Bus TAX J VIII:301–336

    Google Scholar 

  37. Berenbeim R (2012) Corporate governance in emerging markets … and everywhere else. Vital Speeches Int 4(2):43–47

    Google Scholar 

  38. Chew M (2000) Minority shareholders’ rights and remedies. Lexis Nexis, Singapore

    Google Scholar 

  39. OECD (2004) OECD principles of corporate governance. OECD Publishing, Paris

    Google Scholar 

  40. International Corporate Governance Network (ICGN) (2009) A report published by ICGN in 2012. London, UK

    Google Scholar 

  41. Ingley C, Mueller J, Cocks G (2010) The financial crisis, investor activists and corporate strategy: will this mean shareholders in the boardroom? J Manag Gov 15(4):557–587

    Article  Google Scholar 

  42. Normah O, Aida Maria I, Fadzlina MF (2005) Shareholders activisms among institutional founder members of the minority shareholders group: implications on corporate governance practices. A Research Report of UiTM Research Management Institute

    Google Scholar 

  43. Sikavica K, Tuschke A (2012) When do small shareholders take action against ‘their’ firm?: a social identity approach to small shareholder activism, pp 1–37. doi:http://dx.doi.org/10.2139/ssrn.2180039

  44. Yeoh K (2010) The behaviour of individual investors in Malaysia: a governance perspective. Doctoral thesis, Northumbria University, UK

    Google Scholar 

  45. Judge WQ, Gaur A, Muller-Kahle MI (2010) Antecedents of shareholder activism in target firms: evidence from a multi-country study. Corp Gov Int Rev 18(4):258–273

    Article  Google Scholar 

  46. Schacht KN (1995) Institutional investors and shareholder activism: dealing with demanding shareholders. NACD Directorship 21(5):8–12

    Google Scholar 

  47. La Porta R, Lopez-de-SIlanes F, Shleifer A, Vishny RW (1998) Law and finance. J Polit Econ 106(6):11131–11155

    Article  Google Scholar 

  48. Fahmi FM, Omar N (2005) Corporate reporting on minority shareholders information and its implication on shareholders activism in Malaysia. J Financ Rep Account 3(1):17–39

    Article  Google Scholar 

  49. Musa M (2012) The influence of institutional shareholder activism as a corporate governance monitoring mechanism in Malaysia. Waset.org 71:1328–1332

    Google Scholar 

  50. Frantz P, Instefjord N (2007) Socially and privately optimal shareholder activism. J Manag Gov 11(1):23–43

    Article  Google Scholar 

  51. Gillan SL, Starks LT (1998) A survey of shareholder activism: motivation and empirical evidence by. Contemp Financ Dig 2(3):10–34

    Google Scholar 

  52. Gillan SL, Starks LT (2000) Corporate governance proposals and shareholder activism: the role of institutional investors. J Financ Econ 57:275–305

    Article  Google Scholar 

  53. Admati AR, Pfleiderer P (2009) The ‘Wall Street Walk’ and shareholder activism: exit as a form of voice. Rev Financ Stud 22(7):2645–2685

    Article  Google Scholar 

  54. Mallin C, Melis A (2010) Shareholder rights, shareholder voting, and corporate performance. J Manag Gov 16(2):171–176

    Article  Google Scholar 

  55. Rho H (2007) Shareholder activism: corporate governance reforms in Korea. Palgrave Macmillan, New York

    Google Scholar 

  56. Ertimur Y, Ferri F, Stubben SR (2010) Board of directors’ responsiveness to shareholders: evidence from shareholder proposal. J Corp Financ 16(1):53–72

    Article  Google Scholar 

  57. Rehbein K, Logsdon JM, Buren HJ (2012) Corporate responses to shareholder activists: considering the dialogue alternative. J Bus Ethics 112(1):137–154

    Article  Google Scholar 

  58. David P, Bloom M, Hillman JA (2007) Research notes and commentaries investor activism, managerial responsiveness, and corporate social performance. Strateg Manag J 28(1):91–100

    Article  Google Scholar 

  59. Ashforth B, Gibbs B (1990) The double-edge of organizational legitimation. Organ Sci 1(2):177–195

    Article  Google Scholar 

  60. Goranova M, Ryan LV (2013) Shareholder activism: a multidisciplinary review. J Manag 40(5):1230–1268. doi:10.1177/0149206313515519

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Putra Business School, UPM, Serdang, Malaysia

    Sarina Othman & William G. Borges

Authors
  1. Sarina Othman
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. William G. Borges
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sarina Othman .

Editor information

Editors and Affiliations

  1. Universiti Teknologi MARA, Shah Alam, Malaysia

    Jaafar Pyeman

  2. Universiti Teknologi MARA, Shah Alam, Malaysia

    Wan Edura Wan Rashid

  3. Universiti Teknologi MARA, Shah Alam, Malaysia

    Azlina Hanif

  4. Universiti Teknologi MARA, Shah Alam, Malaysia

    Syed Jamal Abdul Nasir Syed Mohamad

  5. Universiti Teknologi MARA, Shah Alam, Malaysia

    Peck Leong Tan

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer Science+Business Media Singapore

About this paper

Cite this paper

Othman, S., Borges, W.G. (2016). Shareholder Activism in Malaysia: Exploring a Missing Parameter. In: Pyeman, J., Wan Rashid, W., Hanif, A., Syed Mohamad, S., Tan, P. (eds) Proceedings of the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014). Springer, Singapore. https://doi.org/10.1007/978-981-287-426-9_32

Download citation

Publish with us

Policies and ethics

Search

Navigation