Protecting Minority Shareholders: Listed versus Unlisted Firms

Abstract

Listed firms have an incentive to render themselves attractive to investors at large. This paper examines whether listed and unlisted firms differ in their care for minority shareholders and finds supporting evidence. We examine control structure, disclosure, board architecture and processes, and director compensation. The corporate governance package in listed firms differs from that in unlisted firms in terms of levels and mix of the different provisions. The data also suggest that listed firms perform better.

Keywords: Minority protection, unlisted firms, corporate governance, board of directors, disclosure

JEL Classification: G30, K00