The institutional governance system is the correct solution for conflicting parties under the agency theory

Abstract

Characterized by modern business ownership contribute to schizophrenia for management. It is natural that the parties intended - the owners and management - maximizing their fortune and their profits at one time. But this may be achieved at the expense of each other. Although it is expected that the Department is working to serve the best interest of owners as possible, but may deviate from this end, more or less towards their own interests at the expense of the owners. Therefore, the activities may not always governed by their expected impacts to the wealth of the last two - the owners, which is expected to give rise to a conflict of interests between the parties. This leads to influence investment decisions and financing, organizational structure, projects and rewards management, and some of the transactions of the project or the company concerned, and thus need these Parties to the neutral reconcile between the company and various stakeholders, and that to not be only be given antibiotic drops system efficiently as tools of corporate governance that it is hoped to be the real key to avoid the conflict between the parties to agency theory. so I tried the study demonstrate the importance of this system to remove any conflict can be done by the various stakeholders, the study found the necessity and quality of this system as a proper solution to the parties opposing the light of agency theory.