One method that businesses use to overcome the principal-agent problem is to:
A) remove the board of directors' oversight of management.
B) reward management regardless of performance.
C) offer management stock options.
D) not give employees a stake in the business.

Question

Quizplus · Accepted Answer

Offering management stock options aligns the interests of management with those of the shareholders, as it provides an incentive for management to work towards increasing the company's stock value.

One Method That Businesses Use to Overcome the Principal-Agent Problem