Abstract
Agency theory is a concept which perceives the company as a nexus of contracts between various actors who cooperate in order to maximize firm profit. Since these actors have different goals and preference, maximizing their own utilities is likely to results in conflicts. The conflicts are mostly identified between shareholders and managers as well as between stakeholders and managers. Conflicts lead to costs and may lower the company performance understood both as financial performance and, mostly in recent years, ESG performance. To mitigate risks of these conflict and to prevent from emerging costs, agency theory offers a number of solutions related to monitoring the executive behavior as well as building incentives to shape their decisions.
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Aluchna, M. (2022). Agency Theory. In: Idowu, S., Schmidpeter, R., Capaldi, N., Zu, L., Del Baldo, M., Abreu, R. (eds) Encyclopedia of Sustainable Management. Springer, Cham. https://doi.org/10.1007/978-3-030-02006-4_814-1
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DOI: https://doi.org/10.1007/978-3-030-02006-4_814-1
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