The Moral Hazard Issue in Corporate Governance: Quest for an Optimal Solution

In this book, I have deduced that traditional mechanisms of Corporate Governance are less effective in overcoming the principal agent problem.Following inductive approach, I have innovated a mechanism of ratings for management.Future career propagation and compensation is linked to the system of ratings.The criteria for ratings of top management is defined different to the criteria of ratings of lower management.Reputation and advertisement are included as support to the system of ratings in order to facilitate the effectiveness of system of ratings.