Which of the following are mechanisms that help minimize agency problems?

Question

Quizplus · Accepted Answer

Monitoring by boards of directors, compensation tied to earnings and stock price, transparent financial reporting, and the threat of takeover are all mechanisms that can help minimize agency problems. Board monitoring ensures that management is acting in the best interests of the company, while compensation tied to earnings and stock price aligns management's interests with those of the shareholders. Transparent financial reporting promotes accountability and helps prevent financial misstatements, while the threat of takeover acts as a disciplinary mechanism against poor management practices.

Which of the Following Are Mechanisms That Help Minimize Agency