Читать книгу How to Be a Lawyer - Jason Mendelson - Страница 25

Agency costs are costs associated with an agent acting on behalf of a principal. Some of these costs are direct. If we hire a stockbroker to buy stocks for us, we must also pay them a fee to complete the trade. Some of these costs are indirect and hard to spot.

Let's use the example of a “walking dead startup company.” This is a company that is still in business, but just limping along with no clear path to an outcome. It would probably be in the startup investors' best interest if the company shut down so the investors could recoup whatever money is left in the bank account and take the tax loss.

Let's consider the investors the principal in the scenario. The CEO of the company, however, has other incentives. He still has a decent salary and gets to walk around town with his CEO business card. His incentive is to keep the company alive as long as possible. The CEO in this case is the agent.

Regardless of the amount of time the investors and the entrepreneur spend together, there is no way either party will know as much about the other's business—and motivation—as they know about their own. This information asymmetry, like agency dynamics, results in a misalignment of incentives.

Consider how contractual provisions could help alleviate this conflict. A contractual right to a board seat for the investors would be helpful. An odd number of board members, with at least one independent board member might be useful. Perhaps a term that says the company will give investors their money back in X years would protect against this situation.