Economic Themes (2010) 48 (1) 1, 1-12
Biljana Predić, Maja Ivanović-Djukić
Abstract: Separating ownership from management in enterprises leads to the appearance of agency problem that is emphasized in large corporations with a great number of shareholders and where the power of top managers is excessive. Immoral behavior of managers towards shareholders can lead to a company’s crash, loss of the life savings of shareholders and numerous economic and social consequences. In order to mitigate the negative impact of agency problem, a great number of measures are undertaken by enterprises. The aim of this paper is to explain measures that can be implemented in the enterprises of shareholder type for prohibiting immoral behavior of managers towards shareholders and thus, avoiding negative consequences of agency problem.
Keywords: management; shareholder; agency problem; Corporate Governance Code; shareholder value
METHODS OF SOLVING AGENCY PROBLEM
Biljana Predić, Maja Ivanović-Djukić
Abstract: Separating ownership from management in enterprises leads to the appearance of agency problem that is emphasized in large corporations with a great number of shareholders and where the power of top managers is excessive. Immoral behavior of managers towards shareholders can lead to a company’s crash, loss of the life savings of shareholders and numerous economic and social consequences. In order to mitigate the negative impact of agency problem, a great number of measures are undertaken by enterprises. The aim of this paper is to explain measures that can be implemented in the enterprises of shareholder type for prohibiting immoral behavior of managers towards shareholders and thus, avoiding negative consequences of agency problem.
Keywords: management; shareholder; agency problem; Corporate Governance Code; shareholder value
