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Left to their fate: rights of minority equity holders in Ghanaian firms

Otuo Serebour Agyemang (Department of Economics and Management, University of Ferrara, Ferrara, Italy)
Emmanuel Aboagye (Department of Health Economics, Management and Policy, University of Oslo, Norway)
Joyce Frimpong (Department of Economics, University of Cape Coast, Cape Coast, Ghana)

Society and Business Review

ISSN: 1746-5680

Article publication date: 9 February 2015

Abstract

Purpose

The purpose of this paper is to examine the rights of shareholders, particularly those of minority shareholders in the management of firms in Ghana.

Design/methodology/approach

As a result of the largely unexplored nature of this issue in Ghana, a qualitative analysis was conducted to offer a painstaking understanding needed. The case study design is in particular relevant for exploring such phenomenon, as it evolves through the experiences of several key players.

Findings

Data indicate that minority shareholders’ influence is, in most cases, nil in every aspect of their firms. Whilst majority shareholders have an absolute right to appoint or influence the appointment of top officials of the firms, minority shareholders’ role in the selection is limited. In addition, in regards to control of corporate decision-making processes, unlike the majority shareholders, the minority shareholders do not have any influence on them. Further, in terms of relevant information, whilst the majority shareholders have absolute access to them anytime they desire, the minority shareholders only rely on annual general meetings to get hold of them, thus limiting their access to corporate information. The revelations unambiguously grant the majority shareholders of the firms absolute control rights whilst undermining the rights of the minority shareholders. This paper was concluded by itemizing the implications of our findings for management, regulators and governments.

Originality/value

It is believed that this is among the handful of studies that have been conducted using developing or emergent economy data to empirically analyse how minority shareholders wield their rights in emergent economies and to add to the mounting pool of scattered cross-country evidence.

Keywords

Citation

Agyemang, O.S., Aboagye, E. and Frimpong, J. (2015), "Left to their fate: rights of minority equity holders in Ghanaian firms", Society and Business Review, Vol. 10 No. 1, pp. 40-66. https://doi.org/10.1108/SBR-08-2014-0040

Publisher

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Emerald Group Publishing Limited

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