What is meant by the term "agency problem"? Why is this important for corporate governance?© BrainMass Inc. brainmass.com March 4, 2021, 5:37 pm ad1c9bdddf
Agents make decisions that affect principals. For instance, agents could be the CEO of a company, and principals are the shareholders.
Agency problems occur when there is a conflict of interest ...
This solution explains the agency problem and discusses terms with examples from the perspective of a CEO and the shareholders of a company. This solution is 127 words.