Which THREE of the following can be used to reduce the principal-agent problem in business organisations?


Which THREE of the following can be used to reduce the principal-agent problem in business organisations?
A . Requiring managers to uphold detailed disclosure and reporting practices
B . Introducing bonuses related to the profit performance of the business.
C . Implementing a ‘top-down’ decision-making process.
D . Implementing a share distribution scheme.
E . Requiring managers to take into account the interests of external stakeholders.

Answer: B

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