________ is a mechanism to mitigate potential agency problems.

Question

Quizplus · Accepted Answer

Tying the income of managers to the success of the firm helps to align their interests with those of the shareholders, as it provides an incentive for managers to make decisions that benefit the company in the long term. This can mitigate potential agency problems, where managers may make decisions that prioritize their own interests over those of the shareholders. Options B and C can potentially exacerbate agency problems, as they provide insulation for top management from shareholder influence. Option D does not necessarily mitigate agency problems and may not result in the most qualified directors being elected to the board.

________ Is a Mechanism to Mitigate Potential Agency Problems