International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Expropriation via Non-Executive Director and Outside Consultant in Family- Owned Companies
Dr. Syaiful Baharee Jaafaar,  Prof. Dr. Kieran James

This article develops a conceptual framework for remuneration committees related to expropriation in family firms involving a non-executive director and outside consultant. The committee manipulates power and control for reward with higher remuneration for themselves with less justification linked to performance criteria. This study highlight issues of ensuring independence, securing positions within firms and maintaining contract leads to the remuneration committee’s expropriation. Of particular interest is the committee’s composition, consisting of a non-executive director but still influenced by the executive family during the remuneration process. Not surprisingly, although their task is to check and balance along with their consultancy, they actually support proposals to please family members. Minority shareholders put the burden on family members’ shoulders for higher remuneration, but poor performance cannot be proven because the proposal reflects a collective decision.

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