An empirical analysis of Latin American Board of Directors and Minority Shareholders’ Rights

This paper examines the link between corporate governance structures and the potential for expropriation of minority shareholders' rights. Analysis of 97 firms from Brazil, Chile and Mexico that traded ADR shares in the United States between 2000 and 2002, indicates that increasing the size of the board by inclusion of additional independent outside directors lowers the potential for expropriation of minority shareholders' rights. Also, increases in the tenure of independent outside directors, decreases in CEOs' shareholdings and more interlocking directors on a board all serve to lower the potential for expropriation of minority shareholders' rights.