Agency Theory and Stakeholder Theory

The video tutorial discusses corporate governance, focusing on the roles and obligations of corporate members, including officers, directors, and shareholders. It introduces agency theory, explaining how directors and officers act as agents for the corporation and shareholders. The tutorial also covers agency principles like duties of care, loyalty, and good faith, and how these principles influence corporate structure and stakeholder interactions.

What are the key roles discussed in the context of corporate governance?

• Regulators, auditors, and analysts

• Suppliers, customers, and competitors

• Officers, directors, and shareholders

• Employees, managers, and clients

According to agency theory, who are considered agents of the corporation?

• Shareholders and customers

• Directors and officers

• Regulators and auditors

• Employees and suppliers

Which of the following is NOT a principle associated with agency theory?

• Loyalty

• Profit maximization

• Good faith

• Duty of care

How does agency theory view the relationship between the corporation and its shareholders?

• As a partnership

• As a principal-agent relationship

• As a competitive rivalry

• As a customer-supplier relationship

What is the primary focus of applying agency principles to corporate structure?

• Maximizing shareholder wealth

• Improving customer satisfaction

• Enhancing product quality

• Governing individual actions