Finance managers in a corporation are responsible for THREE (3) main functions, namely the investment decisions, financing decisions as well as the cash management. These functions involve planning and forecasting of cash flows, control and coordination in order to ensure that resources are efficiently employed as well as dealings in the financial markets to raise capital. The decisions are made with the shareholder in mind which subscribes to the goal of the firm being shareholders wealth maximisation. Shareholders will agree that they are better off if management makes decisions that maximizes the value of their shares. However, delegation of authority for decision making from shareholders to managers creates the potential for agency problems which is ultimately detrimental to shareholders wealth.

Analyse the potential conflict of interest in modern corporations due to agency conflicts and their causes. (800 words)