the company is the company is, in law, a legal person, separate from its shareholders. Breaches of duty by directors will have the primary effect of causes losses to the company. The fiduciary duty requires the company director to act with due care and skill, in good faith, in the best interests of the company and without conflicts of interest. In some jurisdictions deliberate breaches of directors duties can result in civil or criminal penalties. However, as director's duties are difficult to enforce without the involvement of a liquidator. This is in part due to the asymmetry of information between the shareholders and the board (as noted above). In addition, as directors shareholders are not generally owed directors duties, they do not having standing to enforce them (but notably, some shareholders may have action in minority oppression). Similar issues arises with respect to obligations under a contract between the director and the company, given the operation of the privity doctrine. Companies, instead, often opt for incentive schemes based on the performance of the company. These schemes provide bonuses to company directors when the company performs well. The director is therefore given an incentive to ensure the proper performance of the company, thereby aligning their interests with that of the shareholders. The costs of paying the bonus is still an agency cost, but the company will profit from paying this cost so long as the avoided residual cost (as defined above), is greater than the bonus. Another key method by which agency costs are reduced is through legislative requirements that companies undertake audits of their financial statements. Publicly listed companies must also undertake disclosure to the market. These requirements seek to mitigate the information asymmetry between the board and the shareholders. The requirement to make disclosure reduces monitoring costs, and directors are less able to abuse their position when they will be required to disclose their shortcomings. Concentrated Shareholders In jurisdictions outside the US and UK, a distinct form of agency costs arises from the existence of dominant shareholders within public corporations (Rojas, 2014). Modern Examples Enron, a U.S. energy giant operated for decades trading large and highly demanded commodities. However, 2001 saw the fall of the giant as a result of poor management, and a deeply rooted principal-agent problem. Typically speaking, chiefs and management are paid large salaries in the hope that these salaries deter from participation in high risk