The Influence of Corporate Governance Mechanisms on Shareholder Activism

Ling, Jeremy Hong Sheng (2025) The Influence of Corporate Governance Mechanisms on Shareholder Activism. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

This study explores how corporate governance mechanisms influence shareholder activism, with perceived corporate governance quality acting as a mediator among minority shareholders in Malaysian public listed companies. Grounded in Agency Theory and Resource Dependence Theory, the research examines six governance dimensions—board expertise, internal control, board independence, audit quality, risk management, and shareholder rights protection—and their effect on shareholder behaviour. Perceived governance quality is tested as a mediating factor between these mechanisms and shareholder activism. SPSS analysis reveals that perceived board expertise, internal control, board independence, audit quality, and risk management significantly impact perceived governance quality, which in turn influences shareholder activism. However, perceived shareholder rights protection showed no significant effect, suggesting a gap between legal frameworks and shareholder experience. This study contributes to governance literature by highlighting the role of perception in linking governance practices to shareholder behaviour. It offers practical insights for companies and regulators to improve transparency, strengthen trust, and encourage more effective shareholder engagement. Keywords: Corporate governance, Perceived governance quality, Shareholder activism, Minority shareholders, Malaysia.