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The agency problem can be intensified when an agent acts on behalf of multiple principals (see multiple principal problem). [ 6 ] [ 7 ] When multiple principals have to agree on the agent's objectives, they face a collective action problem in governance, as individual principals may lobby the agent or otherwise act in their individual interests ...
The multiple principal problem, also known as the common agency problem, the multiple accountabilities problem, or the problem of serving two masters, is an extension of the principal-agent problem that explains problems that can occur when one person or entity acts on behalf of multiple other persons or entities. [1]
The convergence-of-interest hypothesis suggests that a firm's market valuation should rise as its management owns an increasingly large portion of the firm. On the other hand, the entrenchment hypothesis suggests that as management increases its ownership, the incentive to maximize value declines as market discipline becomes less effective ...
Agency law in the United Kingdom is a component of UK commercial law, and forms a core set of rules necessary for the smooth functioning of business. Agency law is primarily governed by the Common law and to a lesser extent by statutory instruments. In 1986, the European Communities enacted Directive 86/653/EEC on self-employed commercial agents.
Agency cost – loss due to agency problems when using an agent rather than doing something oneself Basel II – Banking regulation framework Co-determination – right of workers to vote for representatives on a board of directors in corporate law Pages displaying wikidata descriptions as a fallback
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In these firms, managers have control over the firm's resources but are not the ultimate owners, which can create a misalignment of incentives. One way to mitigate the problem of residual loss is through the use of performance-based compensation, which ties managerial compensation to the performance of the firm. [9]
The Chinese deal coincided with Cairo’s creating the Egyptian Space Agency (EgSA) in January 2018 and laying out plans for the construction of a Space City on the outskirts of Cairo.