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ACCA Strategic Professional · Strategic Business Leader · Governance scope and approaches

Dravik Industries has a controlling family holding 55% of its shares through a holding company, and the remaining shares are held by many small investors. The family has recently approved a related-party transaction that favours another family business, and minority investors say they were given little information and no opportunity to question it. Which OECD Principle of Corporate Governance is most directly engaged by the minority shareholders' complaint?

The equitable treatment of shareholders principle is most directly engaged. The complaint is that minority investors were disadvantaged by a controlling family approving a related-party transaction with little information or chance to question it. That principle requires protection of minorities from abusive dealings and equal access to material information.

  1. AThe principle on ensuring the basis for an effective corporate governance framework
  2. BThe principle on the equitable treatment of shareholders, including minority shareholdersCorrect
  3. CThe principle on the role of stakeholders in corporate governance
  4. DThe principle on the responsibilities of the board in setting strategic direction

Explanation

The complaint concerns minority shareholders being disadvantaged by a controlling shareholder in a related-party transaction, with limited information and opportunity to question it. That falls under equitable treatment of shareholders, which covers protection from abusive related-party dealings and equal access to information. Stakeholder and board principles are relevant elsewhere but are not the primary focus.

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