QUESTION 19

Which of the following actions would be likely to reduce conflicts of interest between shareholders and managers?

	A.	The companys outside auditing firm is given a lucrative year-by-year consulting contract with the company
	B.	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
	C.	Parliament passes a law that severely restricts takeover activity
	D.	Elect a board of directors that allows managers greater freedom of action
	E.	The companys founder, who is also the chairman of the board, sells 95% of her shares