Background of the Study
Shareholders' rights are a cornerstone of corporate governance, ensuring that individuals who invest in a company are granted specific protections and privileges. These rights include voting on critical decisions, receiving dividends, and accessing accurate financial information. In manufacturing firms, protecting shareholders' rights is vital for fostering trust, attracting investment, and promoting accountability (Abdulkareem & Ahmed, 2023).
In Niger State, manufacturing firms face unique challenges such as regulatory bottlenecks, economic instability, and limited access to resources. These challenges often undermine the protection of shareholders' rights, leading to dissatisfaction and reduced investor confidence. Strengthening these rights is crucial for improving governance practices and sustaining the growth of manufacturing firms in the region.
Statement of the Problem
Despite the existence of regulatory frameworks aimed at protecting shareholders' rights, many manufacturing firms in Niger State struggle with issues such as lack of transparency, poor communication, and limited shareholder participation in decision-making processes (Usman & Aliyu, 2024). These challenges often lead to conflicts between management and shareholders, affecting organizational stability and growth.
Additionally, the enforcement of shareholders' rights is often inconsistent, with smaller investors bearing the brunt of neglect. This situation highlights the need for a comprehensive evaluation of the mechanisms in place to protect shareholders and ensure their active participation in corporate governance.
Objectives of the Study
To assess the mechanisms for protecting shareholders’ rights in manufacturing firms in Niger State.
To evaluate the effectiveness of these mechanisms in promoting transparency and accountability.
To identify challenges faced in protecting shareholders’ rights and propose recommendations for improvement.
Research Questions
What mechanisms are in place to protect shareholders’ rights in manufacturing firms in Niger State?
How effective are these mechanisms in ensuring transparency and accountability?
What are the key challenges hindering the protection of shareholders’ rights in manufacturing firms?
Research Hypotheses
Shareholders’ rights protection mechanisms significantly influence transparency in manufacturing firms.
Effective shareholders’ rights protection mechanisms enhance investor confidence.
Challenges in protecting shareholders’ rights significantly affect organizational stability.
Scope and Limitations of the Study
This study examines shareholders' rights protection mechanisms in manufacturing firms in Niger State, focusing on their effectiveness and challenges. Limitations may include restricted access to proprietary information and potential bias from respondents within the firms.
Definitions of Terms
Shareholders’ Rights: Legal and financial entitlements of individuals who own shares in a company.
Manufacturing Firms: Companies engaged in the production of goods using labor, machines, and raw materials.
Transparency: The degree to which a company openly shares information with stakeholders.
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