Corporate Governance and Agency Theory #agency #theory #islamicbanking #islamicfinance

2 Views
Published
Agency is extremely important in corporate governance, as the directors/managers are often acting as agents for the owners. Corporate governance frameworks aim to ensure directors/managers fulfil their responsibilities as agents by requiring disclosure and suggesting they be rewarded on the basis of performance.
Agency relationship is a contract under which one or more persons (the principals) engage another
person (the agent) to perform some service on their behalf that involves delegating some decision-making authority to the agent.
Agency in the context of director-shareholder relationships is discussed below. However, there are many other types of agency relationships. Corporate governance guidance is concerned with the shareholder auditor agency relationship as well as the shareholder-manager relationship. The auditors act as the shareholders' agents when carrying out an audit, and thus the shareholders wish them to maintain their independence of the management of the company being audited. The problems auditors have when attempting to maintain their independence is dealt with in governance guidance.
....................................................................................
#wakalah #agent #agency #BODs #corporate #governance #islamiceconomics #islamicfinance #islamicbanking #agencytheory #fairness #Accountability #Fiduciaryduty
Category
Management
Be the first to comment