Pso Research
| The Agency Problem | A Financial and Business Analysis of Pakistan State Oil Company Limited for the three year period ended June 30th 2011 | Topic # 8 | [Insert name][ACCA Registration #][Insert Word Count] | |
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Table of Contents
Part One: Project Objectives, Research Questions & Overall Research Approach 3
Part Two: Information Gathering & Choice of business and financial analysis techniques 6
Part Three: Results, Analysis, Conclusions & Recommendations 8
References 27
Part I : Project Objectives, Research Questions & Overall Research Approach
Managerial success is important for firms in the modern world to be successful in achieving shareholders goals and objectives as well as those of other stakeholders. The modern corporation has compounded the problem of ensuring managerial success since ownership and control has been largely divorced which has led to what has become known as the agency problem (Grant, 2002). This exists whereby the separation of ownership and control can lead to managers of the firm pursuing their own goals at the expense of those of the shareholders who appoint them as stewards of their investments. Remember that managerial success is not just earning high returns for shareholders but also ensuring that these returns are concurrent with the long term risk and return objectives of the shareholders (BPP, 2011).
To circumvent these issues, regulation has been drawn up and codes of corporate governance aimed at ensuring that a system of ethics and good practice on how to govern organizations with proper checks and balances have been drawn up the world over to varying degrees of detail and types. The overall goal of these, however, remains that shareholder interests are protected (BPP, 2011). That being said, there have been a number of recent corporate failures despite their being the existence of strong corporate governance systems in place most notably with management
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Table of Contents
Part One: Project Objectives, Research Questions & Overall Research Approach 3
Part Two: Information Gathering & Choice of business and financial analysis techniques 6
Part Three: Results, Analysis, Conclusions & Recommendations 8
References 27
Part I : Project Objectives, Research Questions & Overall Research Approach
Managerial success is important for firms in the modern world to be successful in achieving shareholders goals and objectives as well as those of other stakeholders. The modern corporation has compounded the problem of ensuring managerial success since ownership and control has been largely divorced which has led to what has become known as the agency problem (Grant, 2002). This exists whereby the separation of ownership and control can lead to managers of the firm pursuing their own goals at the expense of those of the shareholders who appoint them as stewards of their investments. Remember that managerial success is not just earning high returns for shareholders but also ensuring that these returns are concurrent with the long term risk and return objectives of the shareholders (BPP, 2011).
To circumvent these issues, regulation has been drawn up and codes of corporate governance aimed at ensuring that a system of ethics and good practice on how to govern organizations with proper checks and balances have been drawn up the world over to varying degrees of detail and types. The overall goal of these, however, remains that shareholder interests are protected (BPP, 2011). That being said, there have been a number of recent corporate failures despite their being the existence of strong corporate governance systems in place most notably with management
References: Attock Petroleum Limited. (2009) Annual Report 2009. Karachi: Attock Petroleum Limited. | Attock Petroleum Limited Attock Petroleum Limited. (2011) Annual Report 2011. Karachi: Attock Petroleum Limited. | BPP Grant, Susan (2002). Stanlake’s Introductory Economics. London: Longman. | Pakistan State Oil Company Limited Pakistan State Oil Company Limited. (2010) Annual Report 2010. Karachi: Pakistan State Oil Company Limited. | Pakistan State Oil Company Limited Pakistan Credit Rating Agency. (2009) Credit Rating Report - PSO 2009. Lahore: PACRA. | Pakistan Credit Rating Agency Pakistan Credit Rating Agency. (2009) Oil & Gas Sector Review. Lahore: PACRA. | Schweser (2009) CFA Level One: Financial Statement Analysis The Economist Intelligence Unit (2010). The World In 2011. [Online]. The Economist Intelligence Unit. Retrieved From: http//: www.economist.com/publications/theworldin.htm [Accessed 20th September 2011] | The Economist Intelligence Unit (2010) Attock Petroleum Limited (2011) Company Information, History, Overview & Upcoming Projects [Online]. Attock Petroleum Limited . Retrieved from:http//: www.apl.com.pk [Accessed 20th September 2010] | Business Recorder Press Reports Dawn Press Reports. 2008, 2009, 2010 and 2011 |