An Agency problem is a situation where agents like management of an organization use their position of authority for their own benefit rather than that of their stakeholders. Within the corporate finance arena, the agency problem is considered as a conflict of interest between the two entities (Stotz 2020). Managers are supposed to make decisions that will maximize shareholder wealth even though it is in the manager's best interest to maximize his own wealth (Chen 2021). The agency problem is used as a basis of judgment in regard to the working relationship between individuals who play an essential role in a company's operation. It is considered highly unethical because it involves exploiting the interests of others for personal benefits