Page 15 - Microsoft Word - 00 P1 IW Prelims.docx

The role and responsibility of the financial manager

Introduction to financial management

The financial manager’s primary aim is to make decisions which will
increase the wealth of the company's shareholders.

However, a company is unlikely to be successful unless it also aims to
satisfy the needs of its other stakeholders too.

The financial manager will have to identify potential conflicts between
stakeholders' objectives and aim to resolve these conflicts.

A further, but associated, problem is the potential agency problem i.e. if
the management of a firm act in their own best interests, rather than in
the best interests of the shareholders.

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