Role of Corporate Governance in Permission of the Agency Conflict

DOI: 10.33917/es-6.172.2020.116-121

The author considers the mechanism of permission of the agency conflict (redistribution of cash flows) between the shareholder and management with use of model of business. In article are considered the economic interests of the company as legal abstraction behind which there are interests of shareholders. Corporate governance in modern realities has to be directed not only to rapprochement of financial interests of shareholders and the management of the company but also to creation of the social benefit.

References:

1. Jensen M., Meckling W. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 1976, vol. 3, pp. 305–360.

2. Denis D. The Case for Maximizing Long-Run Shareholder Value. Journal of Applied Corporate Finance, 2019, vol. 31, pp. 81–89.

3. Friedman M. The social responsibility of business is to increase its profits. The New York Times Magazine, 1970, September, 13, available at: http://umich.edu/~thecore/doc/Friedman.pdf.