CORPORATE GOVERNANCE - ROLE OF BOARD OF DIRECTORS People often question whether corporate boards matter because their day-today impact is difficult to observe. But‚ when things go wrong‚ they can become the center of attention. Certainly this was true of the Enron‚ Worldcom‚ and Parmalat scandals. The directors of Enron and Worldcom‚ in particular‚ were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs‚ of which $13 million was out of pocket
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Title: Case 5 Hewlett- Packard’s Secret Surveillance of Directors and Journalist Martha E Richard Aiken Technical College Abstract Obtaining confidential information by posing as another person was unethical. There are other avenues that could have been assessed to get to the person who was responsible for the leakage in the cooperation to the media. Seeking a private investigation team was an extreme measure in my opinion. What is done in the darkness shall always reveal itself in
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THE EFFECT OF CONFLICT OF INTEREST ON EXECTIVE MANAGEMENT Conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influence by a secondary interest. Primary interest refers to the principal goals of the profession or activity‚ such as the protection of clients‚ the health of patients‚ the integrity of research‚ and the duties of public office. On the other hand secondary interest motives as the desire
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What is the agency theory? Agency Theory is defined the branch of financial economics that looks at conflicts of interest between people with different interests in the same assets. This most importantly means the conflicts between: * shareholders and managers of companies. * shareholders and bond holders. The fact: Agency theory is rarely‚ if ever‚ of direct relevance to portfolio investment decisions. It is used to by financial economists to model very important aspects of how capital
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Introduction of Agency Theory The specific definition of the theory based on the sources investorword.com and investopedia.com defined that the agency theory is a theory explaining the relationship between principals such as shareholders and agents. It is essentially involves the cost and way of resolving the conflicts between the principals and agents and change the something slightly to the correct position and decision related to the two group of conflict. Thus‚ the main objective of agency theory is to
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Definition of ’Agency Theory’ A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving problems that can exist in agency relationships; that is‚ between principals (such as shareholders) and agents of the principals (for example‚ company executives). The two problems that agency theory addresses are: 1.) the problems that arise when the desires or goals of the principal and agent are in conflict‚ and the principal is unable
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“The Board of directors should be strengthened by appointing independent directors.” Efficient Corporate Governance has emerged to be an integral part of running a business in today’s scenario; hence it becomes pertinent to understand the nitty-gritties of the role played by the directors of a company to ensure the same. Over the course of time‚ and among important developments in corporate governance and company law reform corresponding to the same‚ have felt the need for independent directors owing
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© Myles Cook‚ 2006 Milgram’s Agency Theory of Obedience One of the areas that have fascinated psychologists is that of obedience – why does someone obey another? In the period following World War 2‚ the subject became a popular one for researchers fascinated by the amount of obedience shown by the German soldiers in Nazi Germany when faced with orders that resulted in the torture and deaths of millions of Jews. Stanley Milgram‚ a Jew himself‚ decided that the only way to prevent any further
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Agency theory Kenya has 62 micro-finance NGO’s. They have demonstrated that micro-business lending in Kenya is feasible‚ and that small borrowers do pay. They have pioneered new product types and innovations and some are moving toward sustainability. The microfinance NGO’s have played an important part in moving government toward recognition of the small borrower and have been instrumental in advancing the cause of the proposed Micro-Finance Bill. Small borrowers and the informal sector form a
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Agency Theory: An Assessment and Review Author(s): Kathleen M. Eisenhardt Source: The Academy of Management Review‚ Vol. 14‚ No. 1 (Jan.‚ 1989)‚ pp. 57-74 Published by: Academy of Management Stable URL: http://www.jstor.org/stable/258191 Accessed: 14/10/2010 10:43 Your use of the JSTOR archive indicates your acceptance of JSTOR’s Terms and Conditions of Use‚ available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR’s Terms and Conditions of Use provides‚ in part‚ that unless you
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