Of the following list, which represents a potential implication for agency issues when shareholders are physically dispersed or widespread?

Question

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When shareholders are physically dispersed or widespread, it becomes more challenging for them to organize and exert collective control over management decisions. This dispersion can lead to a situation where the CEO has more autonomy in decision-making, including the selection of board members, potentially choosing friends or allies who may not rigorously oversee management actions. This can exacerbate agency issues, where the interests of the management (agents) diverge from those of the shareholders (principals).

Of the Following List, Which Represents a Potential Implication for Agency