Final answer:
The method used when an investor cannot significantly influence a company's management, and their ownership is less than 20%, is known as the minority shareholder protection.
Step-by-step explanation:
The method used when an investor cannot significantly influence a company's management, and their ownership is less than 20%, is known as the minority shareholder protection. In such cases, the rights of minority shareholders are protected by laws and regulations to ensure fair treatment and prevent abuse of power by majority shareholders.
These protections may include:
- Granting minority shareholders the right to vote on certain important matters, such as the appointment of directors or major corporate transactions.
- Ensuring that minority shareholders receive equal treatment in terms of dividend payments and the distribution of company assets in the event of liquidation.
- Providing minority shareholders with access to company information and transparency in decision-making processes.
However, despite these protections, minority shareholders may still find it challenging to influence company decisions if their ownership is significantly smaller than the majority shareholders.