Brahmadev Panda, N. M. Leepsa
Indian Journal of Corporate Governance, Volume: 10 issue: 1, page(s): 74-95
Publication year: 2017

Abstract

This article intends to review the theoretical aspects and empirical pieces of evidence made on agency theory. It is aimed to explore the main ideas, perspectives, problems, and issues related to the agency theory through a literature survey. It discusses the theoretical aspects of agency theory and the various concepts and issues related to it and documents empirical evidence on the mechanisms that diminish the agency cost. The conflict of interest and agency cost arises due to the separation of ownership from control, different risk preferences, information asymmetry and moral hazards. The literature has cited many solutions like strong ownership control, managerial ownership, independent board members, and different committees can be useful in controlling the agency conflict and its cost. This literature survey will enlighten the practitioners and researchers in understanding, analyzing the agency problem and will be helpful in mitigating the agency problem.