0
if the creditors are not paid in time.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
When can there arise a conflict between shareholders and managers goal?
conflicts between a shareholders goals ana a managers goal may arise when the shareholder decides to by-pass the principle of agency theory which states that the mangers and shareholders should have equal rights of financial decision making unless one via the other is made to be clearly resolved through devastating financial effects. the conflict from here then oon arises.
What are the agency problems between shareholders and management?
faak it
Why does the listed company will exist agency problems?
The primary reason for the divergence of objectives between managers and shareholders has been attributed to separation of ownership (shareholders) and control (management) in corporations. As a consequence, agency problems, or principal-agent conflicts exist in the firm.
What is contained in the agency theory?
Agency theory is a theory explaining the relationship between principals, such as a shareholders, and agents, such as a company's executives. In this relationship the principal delegates or hires an agent to perform work. The theory attempts to deal with two specific problems: first, that the goals of the principal and agent are not in conflict (agency problem), and second, that the principal and agent reconcile different tolerances for risk.
The potential conflict of interest between a firms owners and its managers is referred to as what?
agency
According to the agency problem what represents the principle of a corporation?
Shareholders
According to the agency problem represent the principals of a corporation?
The agency problem arises when the interests of the principals (shareholders) of a corporation may not align with those of the agents (managers) running the company. Managers may prioritize their own interests over those of shareholders, potentially leading to agency costs such as managerial entrenchment or excessive executive compensation. Shareholders often rely on mechanisms like board oversight and incentive alignment to mitigate this agency problem and align the interests of both parties.
What are the problems of agency theory?
The agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another's best interests. In corporate finance, the agency problem usually refers to a conflict of interest between a company's management and the company's stockholders.
What is the agency relationship between directors of public ltd company and the shareholders?
The agency relationship between directors of a public limited company and the shareholders is that the directors act as agents of the shareholders. The directors are entrusted with managing and making decisions on behalf of the company, with the aim of maximizing shareholder value. They have a fiduciary duty to act in the best interests of the shareholders and are accountable to them for their actions and decisions.
Agency theory in corporate governance?
Agency theory in corporate governance is a framework that looks at the relationship between principals (shareholders) and agents (management) in a company. It seeks to understand how conflicts of interest arise between these two groups and how they can be mitigated through mechanisms such as executive compensation, board oversight, and monitoring. The theory highlights the importance of aligning the interests of managers with those of shareholders to promote accountability and maximize firm value.
What is the name of the federal government agency that requires publicly held corporations keep shareholders informed of its state of business?
The Federal government agency that regulates everything to do with shareholders and stocks is called the Securities and Exchange Commission. The Securities and Exchange Commission is made up of appointed officials.
How does agency problem affect the relationship of financial manager with the company?
agency problem affects the financial manager relationship with the company by means of trust. if we are going to study the principal-agent relationship (principals=shareholders ; agent=managers,CEO,BOD), the agent will stand for and on behalf of the principal with the accompany of trust and confidence by the principals, but when agency problem occur where the agents are planning to pursue some objectives that are attractive to them while not beneficial for the principal the gap between the shareholders and the management team were created...
