There is often a conflict of interest for senior managers of corporations in that the managers want high salaries and impressive facilities (including golf club memberships, a large office, corporate aircraft, first class air travel, etc.), whereas their primary duty is to maximize profits for the shareholders. How can the company be set up so that the interests of the managers are aligned with the interests of the shareholders who are, of course, the owners of the business? What are some successful/unsuccessful examples?
Agency Issues
Provide examples of direct costs and indirect costs of agency issues