Group 5 Report: Agency Problems and Accountability of Corporate Managers and Shareholders

Agency Problem in Corporate Governance

Principal-agent issues
 Diversification vs dividend
 Managerial Opportunism
 Power Supremacy vs Technical Expertise
 Trust
Identified Agency Problems
 Adverse selection
 Agency cost
 Conflict of interest
 Legal requirements vs opportunistic behaviour
 Self- interested behaviour
 Remedies within shareholders
 Proxy voting
 Benefits of proxy voting
 Routine decision
 Governance
 Issues on anti-takeover
 Derivative suit
 Specific feature
 Process
 Takeover
 Types of takeover
 Friendly takeover
 Hostile takeover
 Reverse takeover
 Tender takeover
 Fianncing a Takeover
 Debt financing
 Partial or full equity conversion
 Share swap /all share deal
External Forces Affecting Governance
 Competitors
 Financers
 Regulatory agencies
 Watchdogs
 Predator companies
 Information enhancers, providers and gatekeepers
 Investment bankers
 Role of investment bankers
 Origination
 Underwritings
 Distribution
 Stock exchanges
 Role of stock exchange
 Raise capital
 Mobilize savings
 Faciltiies growth
 Distributes profit
 Improves corporate governance
 Creates opportunities for small investors
 Facilitates raising capital for the government
 Indicator of economy