When conflicts arise between the long-term interests of owners and those of other stakeholders, the fiduciary duty required of financial managers generally leads them to make decisions that are most consistent with the interests of ownership.

Question

Quizplus · Accepted Answer

Financial managers have a fiduciary duty to prioritize the interests of the owners or shareholders, which often means focusing on maximizing shareholder value, even if it conflicts with other stakeholders' interests.

When Conflicts Arise Between the Long-Term Interests of Owners and Those