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Business
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Number of pages / Number of words: |
14 / 3821 |
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the managers. The agent is delegated power to make decisions and spend the principle's money on behalf of the latter. With this arrangement there arises possible problems. The separation of ownership and control dictates that the managers have increased power and levels of information than the owners and could, without monitoring and regulation, not act in the best interests of the shareholders...
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These agency problems can happen in many ways too numerous to list here but Jensen and Meckling (1976) realised some problems such as Moral - Hazard problems particularly relevant to the UK and US because of the market based contracting economies.
Corporate governance is varied in almost every country depending on a number of factors such as the economic development of the country, the strength of the legal system, the stability of the government but despite this the U...
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