Holderness

What is Agency Theory? The agency theory is an assumption that explicates a relationship between principals and representatives or agents in the business. Agency theory is conducted to solve problems in the firm or any business activities by mutual understanding between two or more groups or parties when exists any problem from agency relationship due to unaligned goals or varies aversion levels to hazard (Jensen and Meckling, 1976) In addition, Agency theory discourses problems which rise in…