You are on page 1of 4

Corporate

Governance is
Important
CORPORATE GOVERNANCE
defines the rights and responsibilities of key corporate participants, decision
making procedures, and the way in which the firm will set, achieve and monitor its
objectives
AGENCY PROBLEM
The tendency that managers may place personal goals
ahead of corporate goals.
Prevention of Agency Problems:
1. Agency Costs
-Monitoring
-Bonding Expenditures
-Structuring
Prevention of Agency Problems:
2. MARKET FORCES:
-Institutional Investors/Shareholders
-Threat of takeover

You might also like