Which of the following is not a component of the solution to the agency problem?
A) Ensure that shareholders are involved in the day-to-day operations of the firm.
B) Ensure that corporate resources and profits are not squandered.
C) Ensure that executives will not make choices that benefit themselves at the shareholders' expense.
D) Ensure that shareholders will receive a positive return on their investments.

Question

Quizplus · Accepted Answer

Having shareholders involved in day-to-day operations can actually create more agency problems, as it may lead to micromanagement and conflicting interests. The other options are all important components of the solution to the agency problem.

Which of the Following Is Not a Component of the Solution