Question

how to reduce the twin agency problem? what are the measures?

Answer 1

Twin Agency Problem

The controlling shareholders can use their power for their own benefit but at the expense of outside investors. State rulers can use their power to improve their own welfare at the expense of all shareholders. Twin agency problems arise because rulers of sovereign states and corporate insiders pursue their own interests at the expense of outside investors.

How to reduce Twin agency problem, what are the measures

1) Not relying on foreign financial market but concentrating on the advancement of legal sense.

2) Laws and regulations inland

3) Strictly examining the companies which apply to be listed on the exchange and prevent the bad companies from going into the market.

4) Beginning the decentralization of ownership with relative smaller companies.

5)  Transforming the state holding company into employee holding dispersed company.