This is a case study on a water sports facility named Liquid Leisure which is owned by Stuart Marston. The aim of this case study is to get a deeper understanding of Liquid Leisure’s capital and business structure and how it affects Liquid Leisure when trying to raise capital. It will also look at potential knowledge gaps within Liquid Leisure and how these potential gaps have formed Liquid Leisure as a company. There are a significant number of research that point out that small/family businesses operates in different ways compared to large businesses. Because of these deviations it is important to know how small/family businesses think to get an understanding of their advantages and disadvantages. This research will provide a deeper understanding of Liquid Leisure as a small/family businesses and how they address corporate governance, bootstrapping and the agency problem. It will also give an understanding of the advantages and disadvantages facing Liquid Leisure when raising debt and equity. These aspects have been compared to the complexity in the characteristics of small/family businesses. This will later be compared to Stuart Marston’s views and how Liquid Leisure is being operated. The results shows that Liquid Leisure has some characteristics in common with other small/family businesses but that Stuart’s behaviour create some complications for Liquid Leisure.

abstract: Mutual monitoring in a well-structured authority system can mitigate the agency problem. I empirically examine whether the number 2 executive in a firm, if given authority, incentive, and channels for communication and influence, is able to monitor and constrain the potentially self-interested CEO. I find strong evidence that: (1) measures of the presence and extent of mutual monitoring from the No. 2 executive are positively related to future firm value (Tobin's Q); (2) the beneficial effect is more pronounced for firms with weaker corporate governance or CEO incentive alignment, with stronger incentives for the No. 2 executives to monitor, and with higher information asymmetry between the boards and the CEOs; (3) such mutual monitoring reduces the CEO's ability to pursue the "quiet life" but has no effect on "empire building;" and (4) mutual monitoring is a substitute for other governance mechanisms. The results suggest that mutual monitoring by a No. 2 executive provides checks and balances on CEO power. / Dissertation/Thesis / Ph.D. Business Administration 2012

The purpose of this thesis was to get a deeper comprehension of how Swedish schools are affected by institutional change, what influence eventual governmental intervention has on the professional autonomy of street-level bureaucrats and towards which direction the educational system is heading.   As a theoretical frame of reference, the study used two primary theories. The first theory consists of a classical work in political science – the theory of street-level bureaucracies by Michael Lipsky. Its insightful pondering on public service workers as policy decisionmakers served as a tool to better understand the crucial part that street-level bureaucrats play in the political game. The second theory is the principal-agent theorem. With its assumtions grounded in rational choice, it aims to explain the agency problem, which occurs when the agent is acting in his own best interest. The principal-agent theory was used in order to explain why the government could have an increased need for control and surveillance. Through empirical evidence, the study found that decentralization leads to an increased governmental need for control and surveillance over Swedish schools. Furthermore, the study found that governmental intervention has a negative impact on the professional autonomy of street-level bureaucrats. The actions taken by the government is indicative of an attempt to strengthen the control of goal fulfillment. Thus, the study concludes that the educational system is heading towards a situation with more political control and less professional autonomy.

Magister Commercii - MCom / The on-going displeasure displayed by the media and business commentators, relating to apparent excessive and unwarranted executive directors' salaries, has increased since the financial turmoil experienced in 2008. The commentaries and reports suggest that corporate governance interventions are not strong enough to curb the excessive remuneration packages awarded to executives and specifically to Chief Executive Officers (CEOs). The purpose of the research is to examine the factors that determine and/or shape the relationship between the Chief Executive Officer's (CEO's) compensation and the wealth created for shareholders. The investigation further seeks to find the corporate governance elements, systems and processes that assist in monitoring the CEO's remuneration and performance contract. The null hypothesis is that poor corporate governance prevails in South African listed companies resulting in CEO compensation not being aligned to shareholder wealth creation. The aim is to establish the effectiveness of South African listed companies' adherence to corporate governance measures in addressing the principal/agent problem, commonly referred to as the agency problem. The research embraces a sample of the top 100 actively trading companies listed on the Johannesburg Stock Exchange (JSE) using secondary data. The study builds on existing theories and provides knowledge from a South African perspective.

Titel: Relationen mellan chefer och medarbetare - Ett principal-agent-perspektiv Universitet: Malmö Universitet Kurs: TR128C – Företagsekonomi: Examensarbete i Transport Management Författare: Jens Andersson, Olle Karlsson & Mattias Pettersson Handledare: Benedikte Borgström Nyckelord: Agentteori, agentproblem, måldivergens, informationsasymmetri, moral hazard, adverse selection, programmerbarhet Syfte: Att utifrån ett principal-agent-perspektiv studera hur relationen mellan chefer och medarbetare i den studerade miljön påverkas av förekomsten av informationsasymmetri och skilda målbilder, samt hur motivationen att prestera på arbetsplatsen kan påverkas av incitamentsstrukturer kopplade till kontraktsupplägget och olika nivåer av övervakning. Metod: Studien har genomförts via en kvalitativ ansats där data insamlats genom intervjuer, observationer och textanalys. Teori: Studiens teoretiska ramverk bygger på principal-agent-teorin och dess komponenter med fokus på informationsasymmetri och skilda målbilder. Slutsatser: I den studerade miljön där relationen mellan principal och agent kännetecknas av hög informationsasymmetri, hög programmerbarhet och parterna motiveras av olika målbilder står principalen inför valet att antingen komplettera ett beteendebaserat kontrakt med tillräckliga övervakningsmekanismer för att utröna agentens beteende, eller försöka upprätta ett resultatbaserat kontrakt. Hög informationsasymmetri kopplat till ett beteendebaserat kontrakt riskerar att lägga grunden för problem kopplade till moral hazard då agenterna blir helt fria att agera efter sina egna målbilder. / Title: The relationship between managers and workers - An agency perspective University: Malmö Universitet Course: TR128C – Business Administration: Bachelor thesis in Transport Management Writers: Jens Andersson, Olle Karlsson & Mattias Pettersson Mentor: Benedikte Borgström Keywords: Agency theory, agency problem, goal divergence, information asymmetry, moral hazard, adverse selection, programmability Purpose: From an agency perspective study how the relationship between managers and workers in the studied environment is affected by the existence of information asymmetry and diverging goals, and also how the motivation to perform at the workplace can be affected by different incentive structures related to the contract form and different levels of surveillance. Methods: The study has been conducted via a qualitative approach and the data has been collected through interviews, observations and text analysis. Theories: The studies theoretical framework is based on the agency theory and its components with a focus on information asymmetry and diverging goals. Conclusion: In the studied environment the relationship between principal and agent is characterized by asymmetrical information flows, high programmability, and diverging goals. This leaves the principal to either reinforce a behavioral based contract with sufficient surveillance to uncover the agent’s behavior, or to try and establish a contract based on results. A high degree of information asymmetry in combination with a behavioral based contract runs the risk of laying the foundation for problems related to moral hazard as the agents are free to act according to their own personal goals.

My dissertation consists of two papers, one in the area of investment and the second in the area of corporate finance. The first paper examines robustness of momentum returns in the US stock market over the period 1965 to 2012. We find that momentum profits have become insignificant since the late 1990s partially driven by pronounced increase in the volatility of momentum profits in the last 14 years. Investigations of momentum profits in high and low volatility months address the concerns about unprecedented levels of market volatility in this period rendering momentum strategy unprofitable. Past returns, can no longer explain the cross-sectional variation in stock returns, even following up markets. We suggest three possible explanations for the declining momentum profits that involve uncovering of the anomaly by investors, decline in the risk premium on a macroeconomic factor, growth rate in industrial production in particular and relative improvement in market efficiency. We study the impact of venture capital funds' (VC) liquidity concerns on the timing and outcome of their portfolio firms' exit events. We find that VC funds approaching the end of their lifespan are more likely to exit during cold exit market conditions. Such late exits are also less likely to be via initial public offerings (IPO). A one standard deviation increase in the age of a VC fund at the time of the exit event is associated with a 5 percentage points decline in the probability of an IPO vs. a trade sale from an unconditional probability of roughly 30%. Several tests indicate that the decline in IPOs with VC fund age is not caused by lower portfolio firm quality. Focusing on the aftermath of IPOs, VC-backed firms experience significantly larger trading volume and lower stock returns around lock-up expirations if they are backed by older funds, and this lock-up effect is amplified if there are multiple VC firms approaching the end of their lifespan. Altogether, our results suggest that the exit process is strongly influenced by VCs' liquidity considerations. / Ph. D.

本研究主要探討的是三大法人是否對公司能夠發揮監督的效果，並加入股東會的因子觀察三大法人是否為了在股東會行使表決權、發揮監督公司效果以達到改善其經營績效的目的而增加其持股比率。研究樣本來自2006年到2014年所有上市上櫃(但不含F股)公司的市場資料及財務資料，並使用普通最小平方法則和固定效果模型對三大法人持股的影響進行分析。 實證結果顯示，三大法人持股比率越高的公司確實會有較好的經營績效，與許多國內外認為機構投資人可以有效監督公司營運的研究結果符合，但在加入股東會因素後，本研究發現只有外資可能藉由其持股在股東會時發揮影響力，以達監督公司之目的；為了更進一步檢驗外資是否真能藉由股東會加強標的公司之公司治理，本研究使用資訊透明度及財報重編次數作為代理變數，模型結果也顯示外資在股東會最後過戶日前有增加持股的公司會有較好的公司治理表現，因此認為外資可能透過股東會以發揮其影響力，但投信及自營商則沒有此行為。

The first chapter of this dissertation examines the returns to frequent acquirers from emerging markets and analyzes the cross-country variations in cumulative abnormal returns. The sample consists of 5,147 transactions carried out by firms from 17 common and civil-law countries during the period of January 1985 to June 2008. I find that the cumulative abnormal returns decline over the deal order and it is more pronounced in civil-law countries than in common-law countries. There is also evidence that the premiums paid by acquirers from civillaw countries with a first successful acquisition are higher than those from common-law countries. These findings are consistent with agency problems and the hubris hypothesis, first introduced by Roll (1986). The second chapter examines the information links across futures markets in different nations, using Vector Autoregressive (VAR)-Dynamic Conditional Correlation (DCC) model. The data comprise a large set of commodity and financial futures traded in U.S., U.K., China, Japan, Canada, and Brazil during the period from August 1998 to December 2008. The primary finding is that market interactions are relatively high for commodities for which information production generally is more diverse (metal commodities), while moderate for commodities for which information is more concentrated (agricultural commodities). Furthermore, the strength and persistence of interactions among futures markets decline after excluding the most informative markets. These findings indirectly support the breadth of information being a relevant factor in the extent of information linkage. The results also indicate that the dynamic correlation in futures markets is high in most commodity and financial futures if there is a significant bi-directional return and volatility spillover. Additionally, I estimate a market’s contribution to the price discovery process. In general, the market that has a stronger price impact and a stronger volatility spillover tends to be the market that has greater contribution or leadership in price discovery.

O objetivo principal desta pesquisa é identificar o efeito predominante da participação de conselheiros independentes nos fundos de pensão públicos do Brasil, entre solução para o problema de agência ou reforço da legitimidade organizacional. O estudo tomou como ponto de partida a dissonância entre a proposta do Senado Federal brasileiro e a posição da entidade que representa o segmento no País sobre a introdução de conselheiros independentes no conselho deliberativo dessas fundações. A pesquisa é de natureza descritiva e tem como aporte as teorias da agência e institucional. Uma amostra de 76 fundos de pensão públicos do Brasil foi estudada com o uso da análise de conteúdo de documentos e de dados compilados em tabelas de frequência e gráficos de dispersão. Os resultados sugerem que a introdução do conselheiro independente na estrutura de governança teria efeito predominante no reforço da legitimidade organizacional, abrangendo 40 fundações ou 52,5% dos casos. Para 36 fundos com alto potencial de problemas de agência, dos quais 31 estão conjugados com baixa legitimidade organizacional, a presença de um conselheiro independente especialista teria efeito predominante no reforço do monitoramento da gestão e no aconselhamento estratégico. O exame da composição dos ativos de investimentos e da presença de mecanismos mitigadores de problemas de agência na estrutura de governança evidenciaram, sob vários enfoques, limitações de escala no conjunto de fundos de pensão públicos do Brasil. Para 83% da amostra observou-se baixo isomorfismo normativo e mimético para práticas de governança corporativa voluntárias relacionadas a princípios de prestação de contas e de transparência. Como relevância para a área do conhecimento, esta pesquisa possibilitou a criação de índices para classificação do potencial de problemas de agência e de legitimidade organizacional no âmbito dos fundos de pensão públicos brasileiros / The main objective of this research is to identify the predominant effect of the participation of independent directors in public pension funds in Brazil, between solution to the agency problem or strengthening of organizational legitimacy. The study took as a starting point the dissonance between the proposal of the Brazilian Federal Senate and the position of the entity that represents these organizations in the country on the introduction of independent directors in the deliberative council of these foundations. The research is descriptive in nature and has the support of agency and institutional theories. A sample of 76 public pension funds in Brazil was studied using content analysis of documents and data compiled in frequency tables and scatter plots. The results suggest that the introduction of the independent director into the governance structure would have a predominant effect on strengthening organizational legitimacy, covering 40 foundations or 52.5% of cases. For 36 funds with high potential for agency problems, of which 31 are coupled with low organizational legitimacy, the presence of an independent director and specialist would have a predominant effect on reinforcing management monitoring and strategic advice. The analysis of the composition of investment assets and the presence of mechanisms that mitigate agency problems in the governance structure evidenced, under various approaches, scale limitations in Brazil\'s public pension system. Eighty three percent of the sample revealed low normative and mimetic isomorphism for voluntary corporate governance practices related to principles of accountability and transparency. As theoritical and academic implications, this research allowed the creation of indexes to classify the potential of agency problems and organizational legitimacy within Brazilian public pension funds

A governança corporativa visa aumentar a probabilidade dos fornecedores de recursos garantirem para si o retorno sobre seu investimento, por meio de um conjunto de mecanismos no qual se inclui o Conselho de Administração. O tema possui importância crescente, por ser bem difundida a hipótese de que a estrutura de governança afeta o valor da empresa. A questão é descobrir se existe uma estrutura de governança corporativa "melhor" ou "ideal". Vários códigos de governança foram elaborados com este intuito. No Brasil, destacam-se os códigos do Instituto Brasileiro de Governança Corporativa (IBGC) e da Comissão de Valores Mobiliários (CVM). Esta dissertação investiga se a estrutura de governança corporativa foi relevante para as companhias abertas brasileiras de 1998 a 2000 e se as companhias adequadas às recomendações do IBGC e da CVM alcançaram maior valor de mercado ou melhor desempenho. Três variáveis de governança foram consideradas: separação dos cargos de diretor executivo e presidente do conselho (DE), tamanho do conselho (TOT) e independência do conselho (INDEP). Utilizou-se uma regressão múltipla do tipo seção transversal entre as variáveis dependentes de valor e desempenho e as variáveis independentes de governança corporativa. A variável diretor executivo como presidente do conselho (DE) apresentou os resultados mais importantes, com forte evidência de que, em média, as empresas que têm pessoas distintas ocupando os cargos de diretor executivo e presidente do conselho são mais valorizadas pelo mercado. A variável tamanho do conselho (TOT) apresentou uma relação certamente não linear, sugerindo que as empresas com um número intermediário de conselheiros alcançam melhor desempenho. A variável independência do conselho (INDEP) não apresentou relação significativa contra as variáveis de valor e desempenho. / Corporate governance seeks to increase the probability that suppliers of financial resources will assure themselves the return on their investment through a set of mechanisms including the Board of Directors. The subject has growing importance, because it is well spread the hypothesis that corporate governance affects firm value. The question is to find out if there is a "better" or "ideal" corporate governance structure for the firm. Several corporate governance codes were prepared with this purpose. In Brazil, we highlight the IBGC (Brazilian Institute of Corporate Governance) and the CVM (Brazilian Securities and Exchange Commission) codes. This dissertation investigates if the corporate governance structure was important to Brazilian listed companies from 1998 to 2000 and if the companies more adjusted to the IBGC and CVM recommendations achieved higher market value or superior performance. Three governance variables were considered: the separation of chief executive officer and chairman positions (DE), board size (TOT), and board independence (INDEP). The multiple regression method with cross sectional data was applied between firm value and performance dependent variables and corporate governance independent variables. The variable chief executive officer as chairman (DE) has showed the most important results, with strong evidence that, on average, firms with different people in charge of the chief executive officer and chairman positions have higher market value than the others. The variable board size (TOT) has showed a clear non linear relation, suggesting that firms with an intermediate number of directors achieve superior performance. The variable independence of the board (INDEP) has not showed a significant relation against the variables of value and performance.