Which of the following can NOT be a solution to agency problem?
An incentive contract that ties executives’ compensation closely to shareholder benefits.
A concentrated ownership structure that allows shareholders to voice their opinion.
An intervention by an activist that bring about changes that enhance shareholder’s value.
CFO of XYZ Inc. serves as a member of the auditing committee of XYZ Inc.
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Conflicts of interest can arise if the agent personally gains by not acting in the principal's best interest. You can overcome the agency problem in your business by requiring full transparency, placing restrictions on the agent's capabilities, and tying your compensation structure to the well-being of the principal
hope it will help you dear ❣️
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