Potential conflicts of interest between shareholders and managers may be overcome if managers are given incentives which cause them to behave as if they were

Question

Quizplus · Accepted Answer

If managers are given incentives to behave as if they were owners, their interests align with those of the shareholders. This is because owners have a direct stake in the success of the company and are incentivized to maximize the value of the company's stock. By aligning managers' interests with those of the shareholders, potential conflicts of interest can be mitigated.

Potential Conflicts of Interest Between Shareholders and Managers May Be