Question (Agency Problem and Corporate Governance Solution)
The principal-agent problem (which exists between shareholders and managers) is one of the central problems in corporate governance. Explain this problem and critically discuss how corporate governance mechanisms can help to mitigate agency problems in publicly listed companies. So, the Agency Problem and Corporate Governance Solution is given below.
Introduction
The topic is about Agency problem as well as principal-agent problem between shareholders and managers in an organization and the role of corporate governance mechanism to reduce this agency problem. The background of the study is that Agency problems between shareholders and managers is a matter of conflict of interest where each party have different motive or interest. Here, Shareholders prefer to increase …