Agency Theory of Corporate Governance The agency theory explains the relationship between the owners of a company (shareholders) and the people who manage it (managers or executives). In a company, shareholders invest their money and expect the managers to run the business well so that they can earn profits. However, this creates a situation where … Read more
Agency Theory This theory focuses on the relationship between company owners (shareholders) and managers. It assumes that managers may not always act in the best interest of owners, so strict monitoring and incentives are used to align their goals. Transaction Cost Economics This theory looks at the costs of running a business, especially when dealing … Read more
Corporate governance is about how companies are run and managed. It provides rules and processes to ensure companies act responsibly, fairly, and transparently towards everyone involved, including shareholders, employees, customers, and the community. Good governance builds trust and ensures businesses make ethical and sustainable decisions. What is Corporate Governance? Corporate governance creates a structure for … Read more