Question
Minority shareholders (often NCI shareholders) are owners of a firm but they often have little influence on corporate decisions. However, one mechanism through which minority
Minority shareholders (often NCI shareholders) are owners of a firm but they often have little influence on corporate decisions. However, one mechanism through which minority shareholders may use to protect their interest is litigation. That is, shareholders can sue the firm, managment team or large shareholders if their interests are jeopardised by the decisions or behaviour of the latters. However, excessive litigation has been raised a concern that it may distract management team and induce overly-conservative decisions. Explain which of the above arguments you are more in agreement with.
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