Name a natural conflict between a principal and an agent. How could this conflict be? reduced?

Agent? Pair: CEOlong dashShareholder.

Shareholders? (principals) and their agent? (the Chief Executive Officer of a? company) often face a natural conflict of interests. So too do supervisors and employees. Given a scenario below which represents such a? conflict, choose a method of addressing the situation so that the conflict may be reduced. One potential conflict would be a? "perk" which the CEO elects to take such as a personal jet for flying to and from business activities instead of flying commercial carriers. The cost of the jet outweighs the expense of commercial carriers so it hurts the company profits.? However, the CEO feels that the private jet allows for greater supervision of the operations and hence a more efficient operation. How could this conflict be? reduced????(Select all that? apply.)

A. Once the pros and cons of the different travel options have been reviewed a company policy can be issued so that shareholders understand the rationale if a private jet is elected for the CEO.

B. This conflict could be reduced by the board of directors reviewing the travel needs and frequency of the CEO and the inconvenience of using commercial carriers.

C. The? CEO, also a? shareholder, would recognize the extravagance of the private jet and determine that it is in his or her best interest to forego the perk.

D. The shareholders could order the CEO to stop using a? jet, thus saving the company? (and the? shareholders) this unnecessary expense.