Asked by LYNETTA White on May 10, 2024
Verified
Conflicts of interest arise when managers act for their own personal benefit rather than for the benefit of shareholders.
Conflicts of Interest
Situations where an individual's or entity’s obligations to multiple parties could compromise the decision-making or actions taken, typically due to a clash between personal and professional interests.
- Acquire knowledge of agency issues and possible resolutions.
- Identify the function of stakeholders within a corporation and the possibility for conflicts of interest.
Verified Answer
CC
conner cavanaughMay 16, 2024
Final Answer :
True
Explanation :
Conflicts of interest occur when there is a divergence between the personal interests of managers and the interests of shareholders they are supposed to represent. This can result in actions that prioritize the manager's personal benefit over the shareholders, which is a breach of fiduciary duty.
Learning Objectives
- Acquire knowledge of agency issues and possible resolutions.
- Identify the function of stakeholders within a corporation and the possibility for conflicts of interest.
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