The Agency Problem arises because of the separation of ownership from control of publicly listed corporate organizations. I. Discuss this statement bringing out what the Agency Problem is and management actions or behaviours that may be considered as giving rise to the Agency Problem. II. Explain five ways in which you believe could be used to minimize the occurrence of the Agency Problem in a Ghanaian listed company of your choice.

The Agency Problem arises because of the separation of ownership from control of publicly listed corporate organizations. I. Discuss this statement bringing out what the Agency Problem is and management actions or behaviours that may be considered as giving rise to the Agency Problem. II. Explain five ways in which you believe could be used to minimize the occurrence of the Agency Problem in a Ghanaian listed company of your choice.

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter2: Ethics & Governance Scandals

Section: Chapter Questions

Problem 8Q

See similar textbooks

Similar questions

Which of the following is true about the Sarbanes-Oxley Act? A. It was passed to ensure that internal controls are properly documented and tested by public companies. B. It applies to both public and smaller companies. C. It requires all companies to report their internal control policies to the US Securities and Exchange Commission. D. It does not require additional costs or resources to have adequate controls.
a) The Agency Problem arises because of the separation of ownership from control of publicly listed corporate organizations.I. Discuss this statement bringing out what the Agency Problem is and management actions or behaviours that may be considered as giving rise to the Agency Problem.II. Explain five ways in which you believe could be used to minimize the occurrence of the Agency Problem in a Ghanaian listed company of your choice
Agency problems are said to be inherent in the corporate form of an organization. Why do you think this is the case?Do you think agency problems arise in a sole proprietorship or a partnership?What steps would you take to reduce agency problems in a so-called typical corporation?
Which of the following statements relating to corporate governance is FALSE? The legal environment in which a corporation does business can have a big impact on its decisions. Type I agency problems are more important in widely held companies. (Tick here if you think that none of the other statements is FALSE.) Straight voting is better for minority shareholders than cumulative voting. In a civil law system, judges interpret the law but they cannot change it.
Within the context of financial management, it is important that organizations attempt to align their managers' interests with that of the shareholders. In Chapter 16, Berk and DeMarzo (2020) provide several examples of agency conflict or a conflict between the owners and the management of a firm. Examples of these are: (a) at times managers will take on less (greater) risk than they would if they were the owners of the firm and (b) due to the separation of ownership and control managers are able to entrench themselves within firms and have little risk of being replaced. Provide a few examples of mechanisms that organizations could use to align the interests of both the owners of the firm and its managers.
Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely.How would you analyze this statement within the context of a limited liability company and what are the possible remedies to this problem?
Which of the following is a remedy for the Agency Problem in the U.S.? Shareholders have the right to elect the board of directors, which can serve as an effective check if the board remains independent of management. Shareholders have the right to overrule any managerial decisions. The U.S. government directly intervenes in company decisions to ensure shareholder interests are protected. The board of directors should always take management roles in the company.
Which of the following is closest to IFRS 3 Business Combinations definition of control? A company is deemed to have control over another only when it owns a majority of the voting shares of another company. B. A company is deemed to have control when it can elect a majority of the Board members of another company. C. Control is the ability to direct the activities of a company that most significantly affect the investor's returns. D. Control exists only when a company has the continuing power to determine the operating and financing policies of another company and attempts to exercise such powers.
The following questions are about corporate governance and executive compensation: (a) How does agency theory address the issue of executive compensation? (b) How might stakeholder theory argue against the current model of executive compensation in the United States? (c) What is meant by the statement, “Compensation systems always become in part end and not simply means”?
A non-executive director of Plumtree plc has been asked to deliver a presentation to the company's executive directors on corporate govenance in his introduction he wishes to make clear the fundamental problem that corporate governance seeks to addressThis is the problem of.A. IrreversibilityB. sustainabilityC. market failuresD. the separation of ownership and control
Analyse the potential conflict of interest in modern corporations due to agency conflicts and their causes.
What does the law assume is the main Corporate Objective of any corporation? Group of answer choices To Protect Individual Interests of the Directors To Enhance Corporate Profits and Maximize Shareholder Gain To Create New Products To Protect Management and the Environment