Brief the term directors and managers, Financial Management

Directors and managers

While directors and managers are in concentrate attempting to promote and balance the interests of shareholders and other stakeholders it has been argued that they also promote their own interests as a separate stakeholder group.

This occur from the divorce between ownership and control where the behaviour of managers can't be fully observed giving them the capacity to take decisions which are consistent with their own reward structures and risk preferences. Directors may therefore be interested in their own remuneration package. In a non-financial sense they possibly interested in building empires exercising greater control or positioning themselves for their next promotion. Nonfinancial objectives are occasionally difficult to separate from their financial impact.

 

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