Corporate Governance and Agency Problems

Menexiadis Marios

Chapter 4 in Governance and Financial Performance:Current Trends and Perspectives, 2023, pp 85-103 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In this chapter, the principal–agent problem is addressed. The agency problem is explained along with real cases used as examples that have been analytically described. The different types of the principal–agent problems are presented and analyzed, along with ways of mitigating the problem.Key takeaways:The agency problem arises when incentives or motivations arise in the one party (agent) that does not act for the best interest of another (principal).Agency problems can be reduced through regulations or by incentivizing an agent to act in accordance with the principal’s best interests.

Keywords: Corporate Governance System; Agency Theory; Return on Assets; Stock Return; Firm Performance; Responsible Management and ESG (search for similar items in EconPapers)
JEL-codes: G3 G34 M14 M41 (search for similar items in EconPapers)
Date: 2023
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