In the absence of monitoring,conflict of interest between managers and owners can be mitigated by closely aligning their interests through the managers' compensation policy.

Question

Quizplus · Accepted Answer

By aligning the interest of managers and owners through compensation policy, managers may be motivated to act in the best interest of owners, reducing the likelihood of conflicts of interest between the two parties. However, it is important to note that monitoring is still necessary to ensure that managers are implementing strategies and making decisions that are beneficial for the long-term success of the company.

In the Absence of Monitoring,conflict of Interest Between Managers and Owners