Original scientific paper
REDUCING AGENCY COSTS BY SELECTING AN APPROPRIATE SYSTEM OF CORPORATE GOVERNANCE
Ljiljana Maurović
Tea Hasić
Abstract
This paper analyzes the Principal-Agent Problem in
Corporate Governance.
Focus is on the question: One-Tier or Two-Tier system
of Corporate Governance – which one is more effective
in reducing Agency Costs?
The authors analyze provisions regulating corporate
governance in different legal systems, and therefore,
they conclude: It should be prescribed by Codes of
Corporate Governance that system of corporete governance
applied in particular company shall depend
on its shareholding structure. Consequently, significant
indication for potential investors to not invest
in the company, would exist if the best practice of
corperate governance (including the system of Corporate
Governance recommended by CCG) is not applied.
Keywords
Principal-Agent Problem; One-Tier and Two-Tier System of Corporate Governance; Directors’ liability
Hrčak ID:
133130
URI
Publication date:
1.12.2013.
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