Agency Theory and TURKCELL Example

The principal-agent problem in companies with many shareholders can cause transaction costs in enterprises. This issue is addressed by Agency Theory, and a number of solutions to it are presented with a conceptual background. The purpose of this study is, first, to provide a background information about the agency theory; and therefore, explain the principals of this subject; and finally, relate it to the example of TURKCELL in light of these principals. The rationale behind selecting the TURKCELL as a case, and the analysis of its structure within the scope of agency theory is due to the fact that this company is subject to monitoring of institutions such as the CMB, BIST, SEC and NYSE, and thus, is under the influences of national and international markets and institutions. The relationship between TURKCELL’s shareholders (principal), and the executives (agent) are examined in terms of an agent, as well as the relationship between the shareholders themselves. The most important conclusion of this study is the dominance of the public (state) effect on the selection of board of directors, which is a contradiction in terms of neo-liberal economic system