b)The ownership data that Sainsbury’s presents shows some amount of information that is related to the corporate governance and the type one agency problem.
With the data that i have gathered, it is safe to conclude that Sainsbury’s will not be facing or expect to suffer from type one agency problem. Information on how the company handles corporate governance is provided in the ownership data which is presented by the chairman of the company, David Tyler. The information given was very transparent and all statements are clearly presented and explained.Sainsbury’s would not likely be affected by type one agency problems because the Chairman of the company states that they take corporate governance seriously and with that , the company held regular corporate governance meeting and hired auditors to observe the efficiency of their corporate governance strategy. Therefore, with regular meetings being held and auditors are hired to monitor the efficiency of the corporate governance of the company, new strategies and new ideas are always updated to ensure that the corporate governance of the company is always efficient.Other than that, the company also hosts an Annual Grand Meeting (AGM) where shareholders can vote out or vote in the board of directors of the company. This means that the shareholders of the company has full power and control on who manages the company.
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If the company is having a type one agency problem, which is the conflict of interests between the managers and agents, it could be resolved with voting at the Annual Grand Meeting.Next, Sainsbury’s also values their relationship with their stakeholders. The main stakeholder of the company would be their institutional shareholders. According to their annual 2017 report, there is an acceptable amount of transparency between the company and their shareholders. One of the ways the company showed transparency is when shareholders are invited to the Annual Grand Meeting and are open to ask any question regarding the company to it’s board of directors. Also, major shareholders are invited to conferences and meetings after the quarterly financial reports are updated.
Other than that, major shareholders of the company are also welcome to join trips to inspect the factory and stores of the company. The company also handles conflict of interest between managers and shareholders really well. In 2013, the chairman of the company , David Tyler used staffs and suppliers of the company to work on his country home. According to the guardian, David Tyler hired members of staffs and current suppliers of the company without disclosing the relationship between them. This sparks some conflict between the shareholders and the managers of the company because David Tyler, being the chairman of the company asked the staffs and suppliers on whether they could work on the heat radiator for his country home.
The staffs and suppliers of the company could not say no to David Tyler and helped him with his problem. Sainsbury’s gave a stern warning to David Tyler as this is clearly an act to pursue his own interest conflicting the interests of the shareholder. If he would profit from the act, there would be more severe consequences dropped on him by the company. In conclusion, Sainsbury’s has a very open relationship between shareholders of the company and the board of directors, and also act accordingly if there is any conflict of interests between them. Lastly, they would also plan new strategies on how to keep their relationship between agents and managers , healthy and running well.