Which THREE of the following can be used to reduce the principal-agent problem in business organizations? (Choose three.)
A) Requiring managers to uphold detailed disclosure and reporting practices.
B) Introducing bonuses related to the profit performance of the business.
C) Implementing a 'top-down' decision-making process.
D) Implementing a share distribution scheme.
E) Requiring managers to take into account the interests of external stakeholders.

Question

Quizplus · Accepted Answer

Requiring managers to uphold detailed disclosure and reporting practices (A), implementing a share distribution scheme (D), and requiring managers to take into account the interests of external stakeholders (E) can all help to reduce the principal-agent problem in business organizations.

Which THREE of the Following Can Be Used to Reduce