Relationship between Managerial Ownership and Agency Cost

The codes of corporate governance for every country are framed to solve agency problems with good monitoring techniques and mechanisms. Monitoring mechanisms are an important tool for aligning the interest of principals and agents. This research study focuses on the link between managerial ownership and agency costs. This research paper also reviews agency theory and its shortcomings. The result findings depict that there is a positive link between the remuneration of directors, large firms, old firms, and asset-utilization ratio but no impact of managerial ownership is found on reducing agency cost.