The paper "Governance in a Globalizing World" is a perfect example of a business assignment. Agency theory is a corporate governance concept deals with the problem of the corporate directors controlling the company that is owned by the shareholders. According to article 02, agency theory states that in the past the problem would arise where the directors of the company were thought not to act in the interest of the other stakeholders especially the shareholders (Fried & Jacobson 2012). The agency theory considers the problem and looks into what could be done to avoid it.
The theory, according to the article on the theory of corporate governance advocates for the creation of an agency relationship between the agent and the principal (Australian Shareholders’ Association Limited 2016b). The shareholders in this case being the principal while the directors are the agents of the shareholder interests in the running of the company. This means the directors of the company are trustees of the shareholder interests in running the organization by exercising their rights in the annual general meeting (Thomsen and Conyon, 2012). A shareholder of a group of shareholders with a proportion of not less than five percent of the voting rights in the company can request the directors to call for a general meeting.
The court according to the article cannot seek the intervention of a government body or a court of law in calling for a general meeting (Australian Shareholders’ Association Limited 2016a). The shareholders of the company also have a right to demand that the company circulates to the other shareholders a statement of not more than a thousand words to the issue being referred to in the proposed resolution as long as the prescribed number of shareholders required for that to happen is met (NASDAQ, 2016).
The shareholders will receive notice of the general meeting with the agenda of the meeting. In some specific cases, the shareholders would receive copies of the documents with the resolutions to be dealt with (Australian Shareholders’ Association Limited 2016a).
Australian Shareholders’Association Limited 2016a, ASA questions increasing use of qualitative hurdles in executive remuneration structures. Available at: https://www.australianshareholders.com.au/sites/default/files/media-releases/asa_questions_increasing_use_of_qualitative_hurdles_in_executive_rem_reports_26_sept_2016.pdf (Accessed: 21 October 2016).
Australian Shareholders’Association Limited 2016b, ASA concerned re non-performance hurdles in remuneration structures. Available at: https://www.australianshareholders.com.au/news/our-latest-media-release-asa-concerned-re-non-performance-hurdles-remuneration-structures (Accessed: 21 October 2016).
Australian Shareholders’Association Limited 2016c, Is it time for metcash chairman rob murray to resign? Available at: https://www.australianshareholders.com.au/sites/default/files/media-releases/is_it_time_for_metcash_chairman_rob_murray_to_resign_13_july_2016.pdf (Accessed: 21 October 2016).
COMMONSENSE PRINCIPLES OF CORPORATE GOVERNANCE no date (n.d.). Available at: http://www.governanceprinciples.org/wp-content/uploads/2016/07/GovernancePrinciples_Principles.pdf (Accessed: 21 October 2016).
Fried, F.H & Jacobson, LLP 2012, Consultation on enhanced shareholder voting rights. Available at: http://www.lexology.com/library/detail.aspx?g=64a28569-ac6e-4e16-acc8-262df71d3ee8 (Accessed: 21 October 2016).
Limited, D.G.S. 2016, Shareholder rights and institutional investors. Available at: http://www.iasplus.com/en-gb/standards/corporate-governance/shareholder-rights-and-institutional-investors (Accessed: 21 October 2016).
McDonald, S and Young, S 2012, ‘Cross-sector collaboration shaping corporate social responsibility best practice within the mining industry’. Journal of Cleaner Production, 37, pp. 54–67. doi: 10.1016/j.jclepro.2012.06.007.
Nasdaq 2016, Disclosure rules & shareholders rights keep executive pay in the spotlight. Available at: http://business.nasdaq.com/marketinsite/2016/Disclosure-Rules-Shareholders-Rights-Keep-Executive-Pay-in-the-Spotlight.html (Accessed: 21 October 2016).
PricewaterhouseCoopers 2015, Are companies finding it more difficult to get a yes vote? Available at: http://www.pwc.com.au (Accessed: 21 October 2016).
Quinn, C & Michal, B 2016, Directors serving multiple corporate boards push trends in governance. Available at: http://www.law.virginia.edu/html/news/2016_spr/barzuza-curtis.htm (Accessed: 21 October 2016).
Three models of corporate governance from developed capital markets 2009. Available at: http://www.emergingmarketsesg.net/esg/wp-content/uploads/2011/01/Three-Models-of-Corporate-Governance-January-2009.pdf (Accessed: 21 October 2016).
Thomsen, S and Conyon, M 2012, Corporate Governance; Mechanisms and Systems, McGraw Hill.
Volker, M 2008, Business basics - the board of directors. Available at: http://www.sfu.ca/~mvolker/biz/bod.htm (Accessed: 21 October 2016).
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Wetzstein, S 2012, ‘Globalising economic governance, political projects, and spatial Imaginaries: Insights from Four Australasian1Cities’. Geographical Research, vol. 51, no. 1), pp. 71–84. doi: 10.1111/j.1745-5871.2012.00768.x