The Role of Corporate Governance in Protecting the Interests of Creditors and Minority Shareholders in Banks: Comparison between Jordanian and Emirati Laws

Abstract

Protection of minority shareholders and creditors is a key objective of corporate governance as both groups’ rights against the company may become at risk if the company incurs losses because of the directors’ abuse of their powers. This study aims to explain the role of some corporate governance principles in protecting creditors and minority shareholders in banking sector. It mainly focuses on three main issues, efficiency of the rules governing directors’ independence, efficiency of standards governing directors’ duty of care, and adequacy of standards governing directors’ duty of loyalty. The analysis will be made by comparing the laws of Jordan and United Arab Emirates with reference to some western jurisdictions where modern corporate governance paradigms exist. The first part deals with the issue of independence and the second part deals with the issues of duty of care and duty of loyalty.