Agency Cost
/ˈeɪdʒənsi kɒst/
Definitions
- (n.) Costs incurred due to conflicts of interest between principals and agents within a legal or corporate framework.
The board analyzed the agency cost arising from executive decisions misaligned with shareholder interests.
Forms
- agency cost
- agency costs
Related terms
See also
Commentary
Agency cost typically arises in corporate law contexts and involves expenses related to monitoring, bonding, and residual loss due to divergent interests between agents and principals.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.