What is it about?
Agency theory plays a key role in the financial economics, which discusses the conflict of interest between the principal and agent due to the separation of ownership from control, different risk preferences, information asymmetry and moral hazards. This theory elucidates that strong ownership control, managerial ownership, independent board members can mitigate the agency conflict in the organisation, which leads to the improvement of the firm performance.
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Why is it important?
The literature on agency theory is vast and its application differs from organisation to organisation and country to country. Hence, this paper made an attempt to analyse the literary works done on agency theory in various perspectives in order to find out the solutions to the agency conflicts.
Perspectives
This review work on agency theory and its application is the summary of many eminent works done across the globe, which will be a guiding factor for the authors to understand the agency theory and its issues.
Brahmadev Panda
Read the Original
This page is a summary of: Agency theory: Review of Theory and Evidence on Problems and Perspectives, Indian Journal of Corporate Governance, June 2017, SAGE Publications,
DOI: 10.1177/0974686217701467.
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