Many companies provide incentives to their managers, which are effective measures to address the principal-agent problem. Governance mechanisms can also be used to address the principal-agent problem by providing greater oversight by shareholders through a managing board.

Which of the following is NOT an effective measure for addressing the principal-agent problem?

Question

Many companies provide incentives to their managers, which are effective measures to address the principal-agent problem. Governance mechanisms can also be used to address the principal-agent problem by providing greater oversight by shareholders through a managing board.  
 
 Which of the following is  NOT  an effective measure for addressing the principal-agent problem?

Accepted Answer

Non-disclosure of information rules and regulations.

Answer

Including a performance bonus provision in employee contracts.

Answer

Share allocation included in compensation packages.

Answer

A set of corporate governance mechanisms.

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Many companies provide incentives to their managers, which are effective measure...

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