The paper "Corporate Governance" is a perfect example of a business assignment. Managers of chairpersons acting dishonestly are not a new phenomenon, as many have been found guilty. The corporate watchdog has warned that failure to perform legal duties can lead to hefty penalties for the directors. The warning from the watchdog came after Andrew Sigalla, former chairperson of TZ Ltd a Sydney-based technological firm was jailed. Based on the agency theory, directors have a tendency to act to satisfy their own interests without considering the interests of the company at large including shareholders, board, and other employees.
The Agency theory's main assumption is that different parties often have interests that differ. In the theory, the owners are known as principals while the managers are the agents and there are always issues between the agents and the principals (L’ Huillier, 2014). Most managers do run the companies in the best interest of all shareholders who are mainly the investors as required of them by the owners. Nevertheless, ownership and control are often separated and this propels some managers to act dishonestly in a criminal manner.
Some of the dishonest ways include embezzlement of funds and excess expenditure. For example in the case of Andrew Sigalla who was hired as a chairperson at a technological, company TZ Ltd. Andrew embezzled over $9 million to pay off a gambling debt and mortgage as was stated in the court. It is clear from the case that, Mr. Sigalla acted dishonestly and criminally to satisfy his personal needs at the expense of the shareholders. To solve such issues the agency solution should be used where the directors and owners should have the mandate to control and manage the company. The dishonest managers have to be investigated without any favors but the question is what is to be done to them if found guilty.
Sigalla was handed a sentence of 10 years jail term with a six-year non-parole term. However, through his lawyer, Sigalla stated that he did not believe he had conducted any wrongdoing which begs many to ask if he was actually right.
L’Huillier, Barbara, M., 2014. ‘What does “corporate governance ”actually mean,?’ Corporate Governance, Vol. 14, No. 3, pp. 300-319.
Bendickson, J., Muldoon, J., Liguori E., & Davis E. P., 2015. ‘Agency theory: the times, they are a-changin,’ Vol. 54, no. 1, pp. 174-193.
Bendickson, J., Muldoon, J., Liguori E., & Cowden J. B., 2015. ‘Why Small Firms Are Different: Addressing Varying Needs from Boards of Directors,’ Journal of Small Business Strategy, Vol. 25, No. 2, pp. 41-57.
Michelman, P., 2016. ‘In Boardrooms, the Same Is a Shame,’ MIT Sloan Management Review, Vol. 57, No. 4, pp. 1.
Ndzi, E., 2015. ‘Remuneration consultants: benchmarking and its effect on pay,’ Remuneration consultants, Vol. 56, No. 6, pp. 637-648.