To place appropriate controls on agents,stockholders with a large stake in the firm take an active role on the board of directors and a strong,independent board is established.

Question

Quizplus · Accepted Answer

This statement is true as it describes common practices for placing controls on agents in a firm. Having stockholders with a large stake on the board of directors can align their interests with the firm's success and ensure that they have a say in how the firm is managed. A strong and independent board can also provide oversight and accountability for the agents who are managing the firm.

To Place Appropriate Controls on Agents,stockholders with a Large Stake