The Board of Directors Duty of Responsibility Towards the Resources of Capital within the Company, in Relation to the Efficient Structure of Incentives

Anders Madsen

Student thesis: Master thesis

Abstract

A liberalizing development in the corporate regulations structure generates a greater flexibility in the duties of the management within a company, creating a wider margin for business estimates. This development is reinforcing the responsibilities and requirements of propriety for management's administrations.
Measures and handling situations regarding the time of hopeless continuance of a company and the assessment thereof, is the central focus point of this thesis. Additional assessments from American jurisprudence are illuminated, with the purpose of creating a possible marginal sight to the Danish civil liability assessments of this area. An analysis of the responsibility ratings is herein the basic composition to the Agency-economic analysis of incentive measures for management behaviour and their handling of risk management and responsibility involved procedures, in relation to the point of no return.
In order to create a basic theoretical understanding, with the maximisation of individual profits and business purposes, the Neo-classic theory is introduced. The Principal/Agent-theory will additionally move the focus of the analysis towards the behavioural perspective, where the basic theory behind authorises the rational incentive for an agent to manage a Pay-Off on behalf of other individuals.
An explanation from the behavioural theory merged with the jurisprudences level of efficiency and its influence of the accurate handling of duties, it is by a game theoretical case introduced ananalysis based on an authentic practise, which will include the Board's (Board of Directors) behaviour, actions and incentive for its handling of an inliquidated Cash-Flow-situation. This case will illuminate responsibility valuation grounds with several assumptions and behavioural assessments.
The purpose of this thesis is to examine and evaluate the Board's duty of responsibility towards the resources of capital within the company. To this purpose an economic theoretic perspective of the incentives structure within the nature of the administrative practice of the company, will allocate and conclude the efficient view within the law-practice and its standards seen from an society overall perspective.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2018
Number of pages83
SupervisorsCaspar Rose