Investment Analysis Question

Question

The corporate governance structure for public companies is an issue for shareholders because they cannot manage the company. In stead they elect a board of directors who then hire senior management. The senior management hires everyone else in the company.

Why does this create an agency problem?

(Check all that apply)

-Management is corrupt or lazy.

-The board of directors is incompentent.

-People act in their own self interest.

-Shareholders and management are different people.

-The laws are inadequate to stop management and employees from breaking the law.

Answer 1

All Apply