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how respond to following comment: okay so the separation of ownership and management creates a conflict of interests between shareholders and managers, shareholders cannot be certain that managers will act in their interests as residual claimants. why is

how respond to following comment: okay so the separation of ownership and management creates a conflict of interests between shareholders and managers, shareholders cannot be certain that managers will act in their interests as residual claimants. why is it big problem? managers are employees. just monitor them.

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Answer #1

monitoring cannot be complete solution to problem of conflict of interests between managers and shareholders because monitor too costly.

answered by: Andrew San Andres
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Answer #2

solutions 2-4 for this problem.

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answered by: Andrew San Andres
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how respond to following comment: okay so the separation of ownership and management creates a conflict of interests between shareholders and managers, shareholders cannot be certain that managers will act in their interests as residual claimants. why is
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