(a) Agency dilemma as Adam Smith wrote in 1776: The directors of companies, being managers of...
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(a) Agency dilemma as Adam Smith wrote in 1776: "The directors of companies, being managers of other people's money, cannot be expected to watch over it with the same vigilance with which they watch over their own." Whereas Berle and Means (1932): "As listed companies grew and their shareholders became more diverse, the separation between owners and directors magnified and power shifted towards the directors, which some of them abused." REQUIRED: Explains the responses to the agency dilemma with an example of each. (10 marks) (b) Greenbury Report was issued in 1995 at the time where UK press was condemning "fat cat directors" particularly those in newly privatized companies. Elucidate general recommendation of Greenbury Report 1995. (a) Agency dilemma as Adam Smith wrote in 1776: "The directors of companies, being managers of other people's money, cannot be expected to watch over it with the same vigilance with which they watch over their own." Whereas Berle and Means (1932): "As listed companies grew and their shareholders became more diverse, the separation between owners and directors magnified and power shifted towards the directors, which some of them abused." REQUIRED: Explains the responses to the agency dilemma with an example of each. (10 marks) (b) Greenbury Report was issued in 1995 at the time where UK press was condemning "fat cat directors" particularly those in newly privatized companies. Elucidate general recommendation of Greenbury Report 1995.
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a Responses to the Agency Dilemma Monitoring and Incentive Alignment One response to the agency dilemma is to monitor and align the interests of directors agents with those of shareholders principals ... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
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