Essays on Governance in a Globalizing World Assignment

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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).

Bibliography

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