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Unpublished Paper
Re-envisioning Investors’ Anti-Director Rights Index: Theory, Criticism, and Implications
  • Sang Yop Kang, Peking University

‘Law and Finance’ theory – which offers analytical frameworks to measure the protection of public investors and the quality of corporate governance – has dominated the comparative corporate governance scholarship in the last decade. So far, many proponents and critics have had debates on the relevance of the theory and the implications of the theory’s empirical studies. Several important points in relation to shareholder protection, however, have been highly neglected in these debates. In particular, the significance of one-share-one-vote (OSOV) rule has been inappropriately underestimated. In response, this Article explores (1) why OSOV is an utmost critical component in corporate governance; and (2) how OSOV (or an exception of OSOV) makes some components of Anti-Director Rights Index (ADRI) – perhaps, the most significant corporate governance index so far – less meaningful. In addition, this Article offers critical examinations on components of ADRI. Features of a controlling shareholder regime (including CMS) are closely examined in the context of OSOV and ADRI. Moreover, this Article introduces possible structural biases as well. To these ends, examples, explanations, and evidence from China and Korea are used, in addition to traditional corporate governance theories based on the US jurisprudence.

  • Law and Finance,
  • LLSV,
  • Corporate Governance,
  • Investor Protection,
  • Anti-Director Right Index (ADRI),
  • One-Share-One-Vote (OSOV),
  • One-Share-Multiple-Vote (OSMV),
  • Voting Leverages,
  • Controlling Minority Structure (CMS),
  • Stock Pyramiding,
  • Dual-Class Equity Structure,
  • Intra-Shareholding
Publication Date
Citation Information
Sang Yop Kang. "Re-envisioning Investors’ Anti-Director Rights Index: Theory, Criticism, and Implications" (2015)
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