Corporate Governance : Literature Review on Agency Costs and Pieces of Evidence on Different Perspectives

This article intends to review different pieces of literature that try to establish a link between the tools of corporate governance and agency costs. Tools of corporate governance play a key role in reducing agency costs. This article focuses on reviewing the literature on ownership structure, firm structure, board structure, and remuneration structure extensively. This paper reviews many aspects of ownership structure as well as firm structure i.e. institutional ownership, non-institutional ownership, managerial ownership, firm age, and firm size respectively. The works of literature have cited many way outs as strong institutional ownership, managerial ownership, the board size, frequency of board meetings, board independence, board composition, board ownership, remuneration structure, and firm age as well as the size can be beneficial in eliminating agency costs. This article uses a descriptive research design. A lottery system of random sampling is used while selecting different kinds of literature reviews of ownership as well as remuneration structure. This article takes the 2004-2019-time period for reviewing of literature. The period is selected based on convenience sampling. This extensive review of literature will enlighten the research scholars as well as academicians in understanding the problem of agency and how tools of corporate governance will help in reducing agency costs