If the composition of the board of directors is changed from all inside directors to all outside directors, and the directors are compensated with stock rather than cash.

Question 4 options:

a)	this would be likely to reduce potential conflicts of interest between stockholders and managers.

b)	this would cause a firm's to managers receive larger cash salaries but fewer long-term options to buy stock.

c)	this would change the way executive stock options are handled, with all options vesting after 2 years rather than having 20% of the options awarded vest every 2 years over a 10-year period.

d)	this would be likely to reduce potential conflicts of interest between stockholders and bondholders.