Shareholder Activism in Promoting ESG in Corporate Finance: Concepts and Emerging Trends in Malaysia

Abstract

Shareholder activism refers to efforts to preserve the rights of minority shareholders through the power of equity holdings and generate actions that cause profits to investors. This article examines the relationship between shareholder activism and corporate finance from the context of concepts and emerging trends in Malaysia. Drawing from doctrinal analysis and extant of literature, the study explores the concept of shareholder activism and its role in promoting good corporate governance in corporate finance. Shareholder activism has gained attention globally, including in Malaysia, where institutional investors and shareholder activist are increasingly influential. The article argues that shareholder activism could enhance corporate governance, align financial objectives, and promote sustainable corporate finance. Emerging trends such as environmental, social and governance (ESG) integration and institutional investor dominance indicate that this dynamic interaction will increasingly shape corporate finance. This paper contributes to the discussion on shareholders activism’s role to promote ESG in corporate finance.