ISSN (E): 2181-4570 ResearchBib Impact Factor: 6,4 / 2023 SJIF 2024 = 5.073/Volume-2, Issue-5
481
management and investor protection. Identifying and overcoming these obstacles is
critical to creating a business environment characterized by accountability,
transparency, and fair treatment of shareholders. The main issues related to improving
the rights and roles of shareholders are presented as follows. Despite the recognized
importance of shareholder rights and the active participation of investors in corporate
decision-making, there are many obstacles that often impede
improving the role of
investors within companies. From inadequate regulatory frameworks to communication
gaps between management and shareholders, addressing these issues is essential to
promoting sustainable business practices and protecting the interests of all stakeholders
involved.
Common issues related to enhancing shareholder
rights
1. Legal ambiguity: In many jurisdictions, including some jurisdictions in
Uzbekistan, the legal framework is unclear or may not adequately protect shareholders’
rights. Ambiguous regulatory rules can create loopholes that allow abuse of power or
prevent shareholders from effectively exercising their rights.
2. Limited shareholder participation: Shareholders,
especially minority
stakeholders, may face barriers when participating in the management of the company
or participating in decision-making processes. Lack of opportunities for meaningful
dialogue and limited access to information can reduce shareholder influence over
corporate governance.
3. Non-transparent corporate practices: Companies
sometimes fail to provide
sufficient information about their operations, financial performance, and
governance
practices. A lack of transparency can hinder shareholders' ability to assess risks,
evaluate management decisions, and hold managers accountable.
4. Board Accountability: Weak board accountability mechanisms can undermine
shareholder confidence in a company's oversight and strategic direction. Inadequate
checks and balances on the board can
lead to conflicts of interest, inadequate risk
management and decision-making that is not in the best interest of shareholders.
5.
Challenges to shareholder activism: Shareholder activists who advocate for
changes in company policies or governance practices may face resistance or obstacles
in gaining support from other shareholders. Limited opportunities
for shareholder
activism can limit the effectiveness of investors in achieving improvements within the
company.
