Entrusted agent relationship


Economists such as rice and Munds have made further deep concern to the entrusted agent relationship, pointing out the inconsistency or contradiction between the principal and the agent in motivation and responsibility and The information is asymmetry, the agent is likely to deviate from the interests of the principal or unfaithful entrustors to adopt opportunistic, ethical risks and reverse choices, so that the entrusted agent cost problem has plagued a good operation of the entrusted agent relationship. .

Basic conditions

Entrusted agent relationships Basic conditions are:

1. Market transactions, there are two or more independent of each other The main body of the behavior, and they maximize utility under certain constraints.

2. Participants in market transactions face uncertainty, and the information they have mastered is in a non-symmetrical state.

There are two different selection behaviors in the commissioned agents:

one is the principal selection agent, and paying it in a certain way, but can not directly observe the agent Behavior, it is also necessary to pay a compensation to the agent results to the proxy result in a certain contract.

2 is the agent chooses its own actions, which will affect its own benefits will also affect the income of the principal, but he chooses the results generated by action, which is random, not fully controlled by him.


Entrusted - Agent Relationship

In the 18th century, with the increasing capital of the science and technology of capitalist countries Progress and market economy continue to develop, enabling the expansion of the transaction and increase capital accumulation, and the size of the company also increases. As a result, the business activities of the capital owner fully independently control the company are increasingly limited by the limitations of the power, time, related knowledge, and management capabilities of the owner. When the business owner cannot personally operate the enterprise or personally operate the company's benefits, it does not meet the ideal expectations to control and operate the company, which is a commission-proxy relationship. Delegation - representative character of the agency theory Michael Jensen and William Meklin define the commission-proxy relationship as a contractual relationship, under this contract, one person or more people (ie the principal) One person (ie, agent) represents them to fulfill certain services, including registering a number of decision-making rights to the agent. As the research on the principal-agent theory continues to deepen, people recognize that commissioning a generation relationship is not only in a company that is owned and the right to operate, but also exists in other areas of human society.

Xue Zhongxing believes that the wisdom of modern ticket number management is to adopt east palm governance models, which constitutes a commission-agent relationship between Dongjia and the shopkeeper.

Principal - Agent Relations

As mentioned above - the representative character of the proxy theory is pointed out: induce a "agent" It is quite common to the "principal" welfare. In all organizations and all cooperatives, in every management level of the enterprise, in the university, in the partnership, in the joint body, in the government agency, in the union, this issue is existing. Bucanan believes that the important differences between economic and polities are not different from the value or interests of people, but in the case of people who are in their different benefits. He assumes that the government is not a Puji people's own savior. The government staff also has their own material interests, and the first time the cost of economic people assumes and economics to introduce political decision-making analysis, and therefore established a public selection theory, so winning 1986 Nobel Economics Award. Obviously, there is a delegate-agent relationship in the political area is the inherent logic of public selection theory.


There are five modifications of the agent:

(1) The principal and the agent are single individual, such as the patient is a principal. The doctor is an agent;

(2) The principal is only one, and the agent is more than one, such as the central government as the principal, several monopoly enterprises are agents;

Entrusted agent relationship

(3 ) The entrusting party is more than one, and the agent only has one, such as many computer users as the principal, a network access service provider is an agent;

(4) The principal and the agent are more For example, many insured is the principal and a number of insurance companies for the proxy;

(5) a single or multiple composite entrustments and proxy, replacement positions are entrusted, the relationship between the agent , Such as the relationship between the publisher and the author's commission, the agent.

Regardless of the mode, the agent masters the information that the entrustment does not understand, including market information, private information, etc., both parties reach the contract that can be accepted with each other in bargain, and acts in contract constraints. Run, get a balanced countermeasure.

forming equalization must have two conditions:

(1) Participate in constraints. The income earnings received after the agent can not be lower than that of a certain revenue, and the principal is given the income level of the agent, and cannot be lower than the income level of the benefit of the benefits that other principal can give, and can be asked. The level of income that other delegates can give.

(2) excitation compatibility. The agent is active as a principle based on the contract, and guarantees that the advisory party is expected to maximize. These two conditions are also the principles of the entrusting party design incentive mechanism.

Legal Characteristics

The legal feature of the entrusted agent relationship can be summarized as: the agent exercises the agency rights within the authorization of the principal, implementing the agency behavior; the principal's interests depend on the agent The behavior of people; the agent implemented behavior in the name of the principal, but the legal consequences of its behavior should be borne by the principal.


There are a variety of entrusted agent relationships in modern enterprise structures, and different from the perspective of division, and the type of entrusted agent relationship is also different. Let's divide from two angles.

(1) From the governance structure of modern enterprises, we found that there are three of the following three entrusted agent relationships in the enterprise:

1 shareholders meeting and board of directors The commissioned agent relationship. The shareholders 'meeting is the highest rights bodies in the stock company, and it cannot directly manage the company, so the shareholders' meeting will elect some shareholders to manage the board to manage enterprises. Therefore, the shareholders' meeting and the board of directors have formed a first level of entrusted agent relationships. Among them, the shareholders' meeting (all shareholders) is the principal and the board of directors is the agent. The board of directors is entrusted by all shareholders to manage companies, and the board of directors is responsible for all shareholders.

2 The principal and management relationship between the board of directors and the management authorities. The board of directors is guided by the commission of all shareholders to supervise the business management activities of the enterprise. But the board of directors is generally not directly managed, but only responsible for the development of some major project decisions. Board members do not necessarily have the ability to manage companies, so the board of directors will appoint people with managed talents directly manage the company, responsible for the management of daily transactions. The management authorities are subject to specific management and business enterprises entrusted by the board of directors to independently implement the decision plan within the board of directors, responsible for daily management. This has formed a commissioned agent relationship between the second floor of the enterprise. The board of directors is a principal and the management authority is an agent.

3 Administration of the Entrusted Agent relationship between the authorities and various department managers. The management authorities independently operate in the board of directors, in order to complete the agency responsibility, the management authorities will appoint all sectoral managers to be responsible for the daily work of each department, and give certain rights. Therefore, the management authorities and various department managers have formed a proxy relationship of the third floor in the enterprise, and the management authorities are the principal, and each department manager is an agent.

There are mainly three levels of entrusted agent relationships in the enterprise, forming a commissioned agency relationship network, and the shareholders' meeting is at the top of the network, and the manager of each department is at the bottom of the network.

(2) from the company's ownership concentration , we get the following two entrusted agents Relationship:

1 Enterprise under the distributed ownership structure, the core entrusted agent relationship of corporate governance issues is a proxy problem between the company's shareholders and managers. Under the conditions of the discrete equity, the manager has become the actual controller of the company. When the two sides have pursued their respective benefits, they produce managers as their own interests of their interests and shareholders' interests, which are inconsistent. This problem has become the core issue of corporate governance. At this point, the main problem to be solved by corporate governance is how to prevent other shareholders from hitchhiking.

From the above point of view we can get: Because the principal is inconsistent with the interests of the agent, the contract is incomplete, the information is asymmetrical, the agent cost will inevitably produce, in order to reduce the cost of agents, A perfect agent incentive constraint mechanism must be established to make the interests of the managers and their own. (Under normal circumstances, this state is difficult to achieve, because managers are constantly pursuing their own interests).

2 In the centralized ownership structure, the entrusted agent relationship in the enterprise mainly has the following two:.

First, that is, the principal and managers between shareholders and managers have produced a series of proxy problems due to the maximization of information asymmetry and both parties in the pursuit of their own interests. Company governance studies the solution of such agency issues, but in the structure of centralized ownership, this agent relationship is not the main agent relationship.

Second, the controlling shareholder and the small and medium shareholder 's entrustment agent - the problem of controlling shareholders' interest in the interests of small and medium shareholders has become the core issue of recent corporate governance. In this case, on the one hand, the control shareholder can obtain and want to increase the sharing of control, that is, enterprises in order to improve the company's value, enhance decision-making and supervision efficiency, so that the equity is concentrated, and the facts show The presence of a large shareholder or the controlling shareholder will mitigate a proxy problem with managers.

However, due to the concentration of ownership, the controlling shareholder or major shareholder has more discontinuous rights and election rights in the company, and even has decisive role in some major issues, major shareholders or controlling shareholders can More control sharing benefits are obtained by issuing multiple stocks, cross-shares, pyramids, etc. to control more actual control.

In addition, the controlling shareholder or major shareholder uses its rights advantages and even through insider messages, related transactions, and implementation of the control of its own financial decision, interest output, etc. Private benefits (Private Benefitsof Control). At this time, the primary issue to be resolved by corporate governance is no longer a proxy problem between shareholders and managers, but due to the proxy problem that the controlling shareholders' interest in the interests of small and medium shareholders and the protection of the protection of SMEs.

inevitable sex

The emergence and development of the entrusted agent relationship between venture capitalists and venture investors is the unique investment method of venture capital market and the unique professional qualities of venture capitalists. And becomes a necessary condition for efficient operation of venture capital market.

First, due to venture capital is an investment behavior of high-tech enterprises that invest in the capital in the overall situation, there is generally existed in the investment process and how effective and supervised after investment. Two problems in the operation of risk companies. Since the projects facing risk investment have strong technical and professionalism, project owners, entrepreneurs and corporate managers know more than external investors, driven by their own interests, they tend to emphasize companies. One side, and concealing the difficulties, this makes the project's choice of uncertainty; in the process of operation, managers have many opportunities to make themselves, which makes themselves. It is necessary to face high technical risks, financial risks, business risks, etc., risk capital, which needs to face the management risks of venture capital, is the moral risk, which requires investors to have considerable management to invest quite energy. In the management and operation of venture companies. Solving these two issues requires investors to conduct complex and meticulous investment surveys and careful trading contract design, and require direct management and supervision after investment. A large number of direct investors don't do these two, and the reasons are two: First, because of the lack of professional knowledge and skills, the second is to interdependent "hitchhiking".

Venture capitalist is a market participant of venture capital raising, management and operation of venture capital investment. They have long been a long-term investment management activity in a certain industry, and have accumulated rich investment experience and have become a professional investor with successful investment experience in certain areas. At the same time, venture capitalists have considerable management in terms of investment experience, and analyzing the ability of judgment and enviable social relationships. Risk capitalists will raise a considerable amount of funds to invest in a few risks in some of the familiar value-added potentials in a certain field, and invested in several risk projects with huge value-added potential, and invested in time and effort to improve projects. The probability of success and the magnitude of capital value added.

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