AGENCY THEORYPERSPECTIVEIN IMPLEMENTATION OF CORPORATE GOVERNANCE

Abstract

The spread of a delegation of authority in organization will be open to thr attitude of the self opportunitiesmanager or parties-parties involved in the interest of the organization and ultimately lead to agency problemthat arise because of thr conflict of interest between the agent and the principal. Agency problem that wasallowed to happen would be difficult for the organization to learn and change. In other word , organizationneed corporate governance as a controlling mechanism ( disciplinary forces) are more effective to align theinterest of principal and agen . In Addition , corporate governance is required as a consequence of theseparation of management a functions to the owner. This study tried to do a study of implementation ofcorporation governance by using agency theory prepective. In other word, the agency prespective is the basisused understand corporate governance. Agency theory is directed to overcoming problems that can occur inagency relationship. a) the existence of conflict of interest between the principal to the agent ; b) the agent triedto avoid the risk ;c) the behavior of agent that are difficult to monitor

Keywords: Agency theory, corporate governance, organization.