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Corporate Governance And Agency Theory How To Control Agency Costs

Author

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  • ISSAM MF SALTAJI

    (Academy of Economic Studies, Bucharest, Romania)

Abstract

Agency theory is considered as the main theory in business word separating ownership from management, which makes conflicts called “agency problems” as a result of interest conflicts between managers and shareholders. These problems are costs on a company to encourage high performance of managers, need to be monitored and minimized to protect the company from bankruptcy. Agency theory grants to manager a huge margin allowing them to use free cash and getting more benefits returned to their own behalf. This relationship is needed to be discussed highlighting on the possibility of controlling and avoiding such as issues can lead the company to unpleasant situation and force managers to lose their positions.

Suggested Citation

  • Issam Mf Saltaji, 2013. "Corporate Governance And Agency Theory How To Control Agency Costs," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 32(1), pages 51-64, December.
    • Handle: RePEc:ath:journl:v:32:y:2013:i:1:p:51-64
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    Cited by:

    1. Riyad Neman Darwazeh & Mohammad Dabaghia, 2018. "Privatization Effect on Shareholder Value in the Jordanian State Owned Enterprises," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 70-78.
    2. Naser Abdelkarim & Khaled Zuriqi, 2020. "Corporate Governance and Earnings Management: Evidence from Listed Firms at Palestine Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(2), pages 200-217, February.

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