The separation of ownership and control in a corporation results in:
A)co-operative decision-making by management and owners
B)decisions by management that represent the best interests of the corporation's owners
C)the removal of any threats of takeover
D)the possibility that management actions will go against the interests of owners
E)decision-making power resting in the hands of owners and not managers

Question

Quizplus · Accepted Answer

The separation of ownership and control in a corporation creates the possibility that management actions will go against the interests of owners, as managers may prioritize their own interests or have different goals than the shareholders. This is known as the principal-agent problem and can lead to conflicts between management and owners.

The Separation of Ownership and Control in a Corporation Results