Study of the Effects of Private Rightʹʹs Shortcomings over Corporate Governance in Securities Exchange

ABSTRACT: Corporate governance has been widely discussed in the business world which is a tool that can help determine the direction of the company. The view taken by the stock market towards it is done aiming to protect the rights of the shareholders as a preventive measure. In this study, it has been attempted to investigate the effects of private rightʹs shortcomings over corporate governance in the stock market. Economic decisions require information that can help them allocate existing and available resources in an optimal way. One of the most important factors in making decisions is accurate and appropriate information related to the subjectʹs decision, which if not properly prepared and processed, the negative effects of individual decisions will follow. Moreover, the very kind of access to information is important. This information and how they are responded potentially affects the behavior of users, especially and cause increasing or decreasing the price and volume of shares being traded. For how people deal with the new information takes shape the priceʹs slippage. As a result, the real value of Exchange Companyʹs stock will vary with expected shareholder value, and this cause fluctuation that the rights cannot contract between the parties that are misinformed.