UK corporate governance reforms have adopted a particular view about senior executives that is consistent with Agency Theory. This theory, used in economics, views individuals as seeking to maximise their own wealth—even if this involves deceit or comes at the expense of others.
Under the assumptions of Agency Theory, managers should be closely monitored and properly financially incentivised if they are to be expected to perform well.
After more than 20 years of research in the area, academics have failed to find consistent evidence that the adoption of various code recommendations is associated with an improvement to firm
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The 2017 Good Governance Report paints a positive picture of the quality of boardroom decisions in our largest organisations, but the focus must now turn to ensuring that the writ of the board is driven down through the organisation.
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