engleski

Reducing agency costs by selecting an appropriate system of corporate governance

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? After detailed analysis of relevant provisions from different legel systems, the authors conclude: It should be prescribed by Codes of Corporate Governance that system of Corporete Governance depends on shareholders' structure in certain company. 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.

Principal-Agent Problem ; One-Tier and Two-Tier System of Corporate Governance ; Directors' liability

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