Independent Directors' Tenure, Expropriation, Related Party Transactions, and Firm Value

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

Related Party Transactions – a closer look at the emergence of the new EU regime

The Amended Shareholders’ Rights Directive adopted in 2017 pushed the regulation of related party transactions high up on the Member States’ legislative agenda. The Directive requires binding rules addressing related party transactions in listed companies. This article takes a closer look at the discussions and negotiations in the EU institutions leading up to the Directive adopted and ends with some reflections on the EU legislative process, drawing on my decades long ministerial experience of negotiating and implementing EU legislation in the field of company law, including this one.

Majority of the Minority Approval of Related Party Transactions: the Analysis of Institutional Shareholder Voting

Majority of the minority (MOM) approval of related party transactions (RPTs) has become a popular mechanism to be used in the oversight of RPTs among academics, stakeholders and regulators. Using this mechanism means that for companies, entering into RPTs are subject to the approval of a certain majority of the disinterested shareholders. This article examines the effectiveness of MOM approval as a mechanism to oversee RPTs, i. e. whether it would prevent value-decreasing RPTs while allowing value-increasing ones, by analysing institutional shareholder voting in this context within the US and European legal framework. Specifically, it examines whether institutional shareholders who dominate the shareholding across the world have sufficient incentives to cast informed votes in MOM votes on RPTs and the role of proxy advisors in this regard. Taking account of the relevant theoretical claims and empirical evidence, it provides further policy recommendations to improve the efficacy of MOM approval.