Answer to Question #182336 in Economics for Alex Korankyeb

Question

What goals might be persued by managers instead of maximizing shareholders wealth

Answer 1

Company managers are often not interested in improving the well-being of shareholders, pursuing personal goals, including the lack of specific benchmarks for their performance and adequate motivation to achieve the set benchmarks.

The solution to the contradictions present in the practice of corporate governance has two components: 1) improving the systems for assessing the efficiency of the enterprise and information exchange between its management and the investment community; 2) the formation of an adequate system of motivation and management control to achieve a balance of interests of managers and owners.