Consequences of the abuse of minority veto rights in public limited companies

Abstract

This study analyzes the abuse of veto rights by minorities in corporations and its negative impact on the overall functioning of companies and shareholder dynamics. The financial and corporate repercussions of this phenomenon are analyzed, assessing its influence on financial stability, operational efficiency and investor confidence. The research identifies concrete cases where the misuse of veto rights has generated internal conflicts, hindered key strategic decisions and compromised corporate objectives. In addition, the study addresses shareholder rights, emphasizing the importance of balancing the interests of the majority with the protection of minority rights. It underlines the urgent need to strengthen legislation to ensure that minority shareholders are treated fairly and equitably, ensuring transparency, accountability and mutual trust among all investors and stakeholders. In a comparative approach, the regulations and practices in corporations in Mexico, Colombia, Peru, and Uruguay are studied, and the way each country deals with the abuse of the veto right. This analysis identifies the legislative similarities and differences and assesses best practices that could be adopted globally to limit corporate risks. The objective is to provide concrete solutions and recommendations that will influence legal and regulatory reforms in other legal cases. The present study contributes to the corporate administration debate, offering thorough and detailed analysis to promote equity. Furtherly, promoting inclusive and sustainable economic development in a global scale.