Essays on Agency Theory in Contemporary Corporate Governance Literature review

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The paper “ Agency Theory in Contemporary Corporate Governance” is an engrossing example of the literature review on management. In regards to Jill Solomon, (2010). Corporate governance has been described variously as a collection of deliberate efforts, checks, and balances, which may be both internal and external to the company, aimed at ensuring that an organization discharges transparency, responsibility, and accountability to all main stakeholders while acting in a socially responsible manner in all areas of business. Corporate governance is primarily concerned with the protection of the interests of the shareholders. Apparently this is to say that the main goal of corporate governance is concerned with the ultimate goal of business in a modern business environment – the goal f shareholders’ wealth maximization (Stout 2012).

The corporate managers and functions are entrusted with the duty of protecting the assets and resources of the organization as such resources are a depiction of the financial commitment of the owners of the company. The role of corporate governance is pure stewardship and this forms the foundation of the agency theory. The primary features of corporate governance revolve around such concepts as accountability, transparency, and responsibility. The primary roles of corporate governance are many, controlling being the most fundamental.

The institution of checks and balances is the fundamental goal of the efforts of corporate governance. Proper corporate governance ensures that there is no possibility of a single individual dominating the decision-making process of an organization. Further, corporate governance concerns itself with the subordination of individual interest to the organizational interest (Jill Solomon, 2010). Similarly, corporate governance is the concept at the center of the associations among the board of directors, the shareholders, and all other major stakeholders.

The primary efforts of corporate governance are concerned with prioritization of the interests of the shareholders in an effort to maximize the returns due to the shareholders. Corporate governance as well as concerns itself with reporting the true and fair analysis of affairs of the corporation. In so doing, the corporate managers uphold transparency and accountability in such a way that the financial reports reflect the financial activity of the relevant period under review.



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Blumstein, C. 2010. Program Evaluation And Incentives For Administrators Of Energy-Efficiency Programs: Can Evaluation Solve The Principal/Agent Problem? Energy Policy, 3810, 6232-6239.

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Calder, A. 2008. Corporate Governance: A Practical Guide to the Legal Frameworks and International Codes of Practice. London, Kogan Page.

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Stout, L. A. 2012. The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, And The Public. San Francisco, Berrett-Koehler.

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