Management-Stockholder Relations: Is Optimal Behavior All That Is Necessary?

  • John B. GuerardJr.
  • Anureet Saxena
  • Mustafa Gultekin


So long as a company is closely held, the control group and the stockholders are identical and seldom is there a conflict of interest between them. However, once a company goes public, it acquires a group of shareholders who depend on the management for the safety and profitability of their investment. In short, an agency-principal relation is established where the management is the agent and the shareholder is the principal. This relation implies a commitment by management that the outside shareholders will be treated fairly in such matters as cash payouts, expansion policies, accounting probity, and the level of executive compensation and that in general the company affairs will be directed vigorously and conscientiously.


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Copyright information

© Springer Nature Switzerland AG 2021

Authors and Affiliations

  • John B. GuerardJr.
    • 1
  • Anureet Saxena
    • 2
  • Mustafa Gultekin
    • 3
  1. 1.McKinley Capital Management, LLCAnchorageUSA
  2. 2.McKinley Capital Management, LLCStamfordUSA
  3. 3.Kenan-Flagler Business SchoolUniversity of North Carolina Chapel HillChapel HillUSA

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