Difference between revisions of "Agency problem"

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''Value management.''
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The agency problem refers to the problems which arise when management of an organisation is separated from its ownership.
 
The agency problem refers to the problems which arise when management of an organisation is separated from its ownership.
  
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* [[Agency theory]]
 
* [[Agency theory]]
 
* [[Asymmetry of information]]
 
* [[Asymmetry of information]]
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* [[Goal congruence]]
  
 
[[Category:Corporate_finance]]
 
[[Category:Corporate_finance]]
 
[[Category:Manage_risks]]
 
[[Category:Manage_risks]]

Latest revision as of 13:34, 8 April 2021

Value management.

The agency problem refers to the problems which arise when management of an organisation is separated from its ownership.


The main potential problem is that the managers (agents) may not act in the best interests of the owners (for example shareholders).

When managers do not act in the owners' best interests, agency costs will arise.


See also