General Studies · Agency Theory
There is an agency relationship between some stakeholders in a company. An agency relationship is between a principal and an agent. In terms of business, who would be the agent and who would be the principal?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The senior management are the agents, the board of directors are the principals
- 2The board of directors are the agents, the senior management are the principals
- 3The board of directors are the agents, the shareholders are the principals✓
- 4The shareholders are the agents, the board of directors are the principals
Correct answer
The board of directors are the agents, the shareholders are the principals
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