Corporate Governance
Agency Problem
Definition
What is Agency Problem?
A conflict that arises when managers or agents may act differently from the interests of owners or principals.
Example in practice
How This Looks in Practice
Managers may pursue an expensive acquisitionThe purchase of control or ownership of a company or business. that increases prestige but destroys shareholderA person or entity that owns one or more shares in a company. value.
Keep learning
Related Terms
Corporate Governance
Proxy Vote
A vote cast by another person or electronically on behalf of a shareholder.
Corporate GovernanceAnnual General Meeting
A yearly shareholder meeting at which financial reports, directors, auditors, and other matters are considered.
Corporate GovernanceExtraordinary General Meeting
A shareholder meeting called outside the normal annual meeting to consider urgent or special matters.
ETF MechanicsCreation Unit
A large block of ETF shares exchanged between the fund and authorised participants.