Divorce of ownership of control Flashcards
1
Q
Divorce of ownership of control
A
The owners and those who manage the firm are different groups with different objectives
2
Q
Principle agent problem
A
The principle appoints an agent to perform tasks for the but the incentives of the agent may differ from the principle
3
Q
How to deal with principle agent problem
A
Employee share-ownership schemes, shareholder activism (making shareholders happy or kicked out), Delist
