Comments on: The boss http://managingleadership.com/blog/2008/02/04/the-boss/ The strategic role of the senior executive Fri, 09 Jan 2009 23:04:28 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Jim Stroup http://managingleadership.com/blog/2008/02/04/the-boss/comment-page-1/#comment-3026 Jim Stroup Fri, 08 Feb 2008 21:26:26 +0000 http://managingleadership.com/blog/2008/02/04/the-boss/#comment-3026 Hello Wally, Yes - the agency problem. This is the way it is referred to in related parts of the law - especially contract law and the commercial code. You're right that this concern was raised when the corporate structure came into being - especially when it took the form of ownership via anonymous shareholders of companies traded publicly on a stock exchange. The peculiar legal aspects of the device that made it so powerful also stretched the agency relationship beyond a sustainable point. That is a major theme of this part of the discussion. I just wish I had thought to tighten the discussion by using this language! It would have made the theme more clear and concise. Well - maybe in the book! Thanks, Wally, for your visit and your clarification of the terminology - I will be able to incorporate it, I think, into the discussion, actually, in a bit - thanks! Hello Wally,

Yes - the agency problem. This is the way it is referred to in related parts of the law - especially contract law and the commercial code.

You’re right that this concern was raised when the corporate structure came into being - especially when it took the form of ownership via anonymous shareholders of companies traded publicly on a stock exchange. The peculiar legal aspects of the device that made it so powerful also stretched the agency relationship beyond a sustainable point.

That is a major theme of this part of the discussion. I just wish I had thought to tighten the discussion by using this language! It would have made the theme more clear and concise. Well - maybe in the book!

Thanks, Wally, for your visit and your clarification of the terminology - I will be able to incorporate it, I think, into the discussion, actually, in a bit - thanks!

]]> By: Wally Bock http://managingleadership.com/blog/2008/02/04/the-boss/comment-page-1/#comment-3022 Wally Bock Fri, 08 Feb 2008 20:26:43 +0000 http://managingleadership.com/blog/2008/02/04/the-boss/#comment-3022 The problem of synchronizing the actions of management with the desires and best interests of the owners is called the Agency Problem. In the early days of corporations there were many who argued that one reason that corporations would never be as effective as partnerships was that you couldn't trust hired managers to care for the business the way owners would. The problem of synchronizing the actions of management with the desires and best interests of the owners is called the Agency Problem. In the early days of corporations there were many who argued that one reason that corporations would never be as effective as partnerships was that you couldn’t trust hired managers to care for the business the way owners would.

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