Which of the following governance mechanisms is regarded as the option of last resort?

Question

Quizplus · Accepted Answer

Takeover constraint is considered the option of last resort as it involves the acquisition of the company by an external party. This is typically seen as a drastic measure and is only used if other governance mechanisms have failed to address issues within the company. Other options such as strategic control systems, the board of directors, stock-based compensation systems, and financial statements and auditors are considered more proactive and preventative measures.

Which of the Following Governance Mechanisms Is Regarded as the Option