Governance Mechanisms and Agency Conflicts between Managers and Shareholders: Evidence from Australia

26 Pages Posted: 24 Jul 2013

See all articles by Thanh Truong

Thanh Truong

RMIT University

Richard A. Heaney

University of Western Australia

Date Written: February 22, 2013

Abstract

This paper focuses on the links that exist between corporate governance attributes and equity agency conflicts for the top 500 Australian listed firms. Our proxies for equity agency conflicts (asset utilisation and discretionary operating expense ratios) vary significantly across firms and are generally lower than those for large U.S. firms and U.K. firms. Consistent with previous studies, inside ownership, board size, board leadership and short-term debt financing, are positively related with efficient use of assets, but not with reduced discretionary operating expenses. There is evidence of a non-linear relation between the measures of efficiency and both inside ownership and board size.

Keywords: equity agency conflicts, ownership, board of directors, debt financing

JEL Classification: F02, G32, G34

Suggested Citation

Truong, Thanh and Heaney, Richard A., Governance Mechanisms and Agency Conflicts between Managers and Shareholders: Evidence from Australia (February 22, 2013). Available at SSRN: https://ssrn.com/abstract=2297143 or http://dx.doi.org/10.2139/ssrn.2297143

Thanh Truong (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Richard A. Heaney

University of Western Australia ( email )

Crawley
Perth, Western Australia 6009
Australia
0414700799 (Phone)

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