Protecting Small Shareholders: Key to Healthy Development of Securities Market
Large shareholders can harm small shareholders by not supervising company managers properly. This is because small shareholders don't pay for supervision, leading to a "free-rider problem." To solve this, large shareholders should be compensated for their supervision efforts. Laws and corporate governance rules should also protect investors' interests better. By doing this, large shareholders will be less likely to harm small shareholders, helping China's securities market grow in a healthy way.