The paper "The Powers and Duties of the Directors of Companies in Light of the Agency Theory" is an engrossing example of coursework on business. Best Corporate Governance practices concerning listed companies have been widely researched with a view to increasing the effectiveness of governance mechanisms. This paper finds that Corporate Governance has divergence and competing definitions---one of such is Margaret Blair’ s assertion as “ … the whole set of cultural, legal and institutional arrangements that can be used to determine what publicly traded corporations are able to do, how that control is exercised, who controls them and how the returns and risks from the activity undertaken are allocated (Aguilera & Jackson 2003 p.
34). In as much, contemporary scholars have attempted to narrow the expansiveness of the definition (Stout, 2008; Ghoshal, 2005; Gomez-Mejia et al. 2005). This has been so due to the ascendancy of financial markets and the intellectual domination as posited by the agency theory into an almost obsessive concern for the issues related to accountability and controls that are involved in the dispersal of ownership of the listed companies and a rigid focus on the mechanisms that can orientate duties of the directors of listed companies in light of the theory and still have some connectedness with powers of shareholders and directors.
The underpinning of agency theory in this study guides the composition of shareholders and directors. It considers the existing relationships where responsibility can be delegated from seniors to agents. To show the effect of an increase in powers, agents tend to assume to be self-interested and possess goals that are divergent from those of the seniors. Contemporary arguments posit that directors are accountable for the listed companies they govern (Mukwiri & Siems, 2014).
High profile accounting irregularities, collapses, remuneration excesses, corporate corruption, and inadequate disclosure practices attracted the attention of scholars at the same time dented public confidence especially among listed companies, and the implication on corporate governance. For instance, Daily and Dalton (2003) argue that the activity and scale of corporations have been on increase immeasurably. That is, the governance of the concerned entities has assumed considerable importance.