tcdn bằng tiếng anh hvtc, vấn đề về đại diện trong DN, agent problem

The relationship between shareholders and management is called an agency relationship. In all such relationship, there is a possibly of conflict of interest between the principal and the agent. Such a conflict is called agency problem. The manager (or the agent) is the person who owns only a small part of the equity of a company, whereas the principal owns the majority of the equity. Due to the separation of ownership and management, there is a problem that managers can act on their own interests more than the interests of the owners, and is an example of moral hazard

COPORATE FINANCIAL IN ENGLISH

GROUP :

-The Agency problem

Hare holders stnemegana

AGENCY RELATIONSHIP

Possibly of coflict of interest

AGENCY PROBLEM

The manager (or the agent) is the person who owns only a small part of the equity of a company…

…the principal owns the majority of the equity

In large corporation the managers are not the owners

managers maybe tempted to act in ways that are not in the best interests of shareholders

For example: they might buy luxurious corporate cars

or overindulge in expense-account diners

the interests of the mandator (the company, the shareholder) and the interests of the mandated (director) are contradictory

the director clearly ignores the common

good of the business, which should be his

ultimate goal

L o s t

I t They might shy away from attractive but risky projects because they are worried more about the safety of their jobs than the potential for

superior profits

The shareholders, must seek to ensure that the authorized person (the manager) acts in the interests of the mandator

Solu tion

Authori zation

To achieve this, shar

eholders m ust spend

:

monitor the performance of managers…

…create incentives for managers to pursue maximizing the

of shareholders, not just for personal gain

Several following arrangements are believed to help shareholders and manager are working toward common goals

PLAN

compensation schemes encourage management to maximize shareholder

se pro

fit for the a

gents

Rewarding managers means improving the benefits for

shareholders

Shareholders ca n reward manag

ers with stock op tions, allows the

m to buy stock a t

a certain date in the future at a fxed price

from the day the m anager is

given the right to b uy the stock and the date of

exercising the right to

buy

If the p rice of

a stoc k rises s trongl

y

the real manager will earn a fortune by buying the stock at a predetermined

price and selling it to the market

These managers have a clear benefit from pushing up stock prices and thus to a certain extent have reached consensus with shareholders, as the company works well,…

… they both will helpful.

The boards of Directors

Board of directors are often portrayed as passive supporters of top management

But when the performance starts to slide

and managers don’t offer a credible

recovery plan , boards do act

To solve the problem of the boss and the agent , the owner or major shareholder of the company may be dismissing

bad management, but it is extremely difficult

The shareholder must have time, energy and money to determine if the

board of directors really works

In addition, the legal mechanism that makes dismissing a bad manager is complex and time-consuming

On the other hand, they can try to replace the board in the next election

The dissident shareholders will attempt to convince other shareholders to vote their slate of candidates to the board

If they succeed, a new board will be elected and it can replace the current

managem ent team

So taking full control of the company by acquiring equity contracts to set up a

new management team is a good solution for the principals and the agents

The problem is that if the management is not be able to run the company effectively, the stock price will

decrease

The company may be at risk of being taken over by another company, and of course senior management positions will lose their jobs

This threat remind managers to keep their eyes on the company’s performance

Specialists Monitoring

Specialists Monitoring

Managers are subject to the scru tiny of specialists

Their actions are monitore d by the security analysts who advise investors to bu y, hold, or sell the

company’s shares.

By this way, tightly monitoring in formation from the owner can m

inimize the disagreement by im manager balance information between th e owner and

They are also reviewed by banks or lende rs, which keep an eagle eye on the progre

ss of firms receiving their loans

Moreover, if the manager knows he is closely monitored by other shareholders, he will pay more

attention to the company's profits

Legal and Regulatory Requirements

CEOs and financial managers have a legal duty to act responsibly and

in the interests of investors

(SEC) sets accounting and reporting standards for public companies in order to ensure

consistency and transparency

The SEC also prohibits insider trading, that is, the purchase or sale of shares based on

information that is not available to public investors

However, the manager can use fraudulent measures and detecting fraud is not easy Most notably, the scandal led to the bankruptcy of the US energy giant Enron - the largest bankruptcy reorganization in   American history in 20th century

legal and regulatory standards compensation plans that tie the

fortunes of the managers to the fortunes of the firm

monitoring by lenders, stock

market analysts, and

investors

taken over by another company

rewarding managers for their

dedication

ultimately the threat that poorly performing managers can be fired

Agency problems are mitigated in practice in several ways

In the past time, PNC has attracted much attention from investors due to internal turbulence This has been confirmed in the report of the year 2016 and the business plan of 2017, the management of PNC has pointed out the weakness of this business is "the struggle for rights and conflicts between an ancient group The large shareholders with small shareholders have adversely affected the prestige and reputation of the PNC brand, causing some disadvantages for the company's business "

Typically, the independent auditor DTL concludes that the consolidated financial statements of PNC "reflect fairly and reasonably in all material respects ." but the group of shareholders still refuses to believe in The result of this audit is that all results of the PNC Board of Directors 'financial statements made before the shareholders' meeting are "false information disclosure" and "profit-loss" However, when asked to provide evidence to prove their allegations to the entire shareholders, this group of major shareholders is still not able to do

Selecting an auditor is always controversial

As a result, both the group of shareholders and the Board of Management agreed to hire another auditing company to audit the business results For the group of shareholders, the purpose is to find fault with the Board of Directors, the purpose is to prove the clean operation of his.

In the past years, PNC's shareholder meeting always had problems, because the major shareholders did not approve the majority, even not passed any content submitted at the meeting, or not enough shareholders For the voting shares as required by law to hold the meeting Internal cluttered by experts said that is part of the reason that PNC was suspended trading, controlled, warned for violating regulations on disclosure of information on the market

Struggling with the election of additional members of th e Board

In the Extraordinary General Meeting of Shareholders, only the election of additional members of the Board of Directors, with the number of candidates only one person is Mr Le Lam Vien, while the number needed is 5 people, so he raised the subject Another alternative is to nominate candidates for the Board of Directors by the shareholders participating in the Extraordinary General Meeting of Shareholders, instead of only shareholders or groups of shareholders owning more than 10% of shares for more than 6 months to be nominated However, when voting for this option, the two major shareholders and other shareholders continue to disapprove with the rate of 62.42%.

Accordingly, only one qualified candidate, Le Lam Vien, was nominated by a group of shareholders holding more than 10% of the share capital before the congress After voting, Mr Vien was elected to the Board of Directors.

Mr Hoat shared the urgency of the AGM, the noncooperative actions of the major shareholder group will undoubtedly affect the future operation of PNC,

as new projects are likely to fail deployment

Continue to be prompted slow information disclosure

By the time of 6/2017, Phuong Nam Cultural Joint Stock Company has been reminded by the HoSE for the third time about delayed disclosure of parent company financial information and consolidation of Q1 / 2017 PNC shares of Phuong Nam

Cultural Joint Stock Company are under special control due to frequent violations of disclosure

At the 3rd extraordinary shareholders 'meeting on 26/10/2017, after many failed times, the final extraordinary shareholders' meeting

of Phuong Nam Cultural Corporation (PNC) officially passed a series of issues In the past, there was no common voice between the old leadership and the major shareholder group

The submissions submitted to the Extraordinary General Meeting this time include the amendment of the charter, the plan for the dismissal of the Board of Directors and the Board of Supervisors, and the plan for re-election of the Board Members Member of the Inspection Committee for the term 2017-2021.

Southern Culture (PNC): "Civil war ended"

…The meeting approved all contents including 2016 business results, 2017 business targets, auditing

units and changed the entire leadership of the Company

In 2017, PNC plans to have a total revenue of 600 billion VND, profit before tax of 10 billion VND!