What Does Agency Theory Mean?
A theory concerning the relationship between a principal (shareholder) and an agent of the principal (company's managers).

Investopedia explains Agency Theory
Agency theory is a very academic term. Essentially it involves the costs of resolving conflicts between the principals and agents and aligning interests of the two groups.

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Agency Problem
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Related Links

The Basics Of Corporate Structure - CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
Agency Theory Framework - An article dealing with the problems arising in a principal/agent relationship.
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