The conflict between managerial and stockholder interests at the heart of the corporate governance problems. In which of the following firms is the conflict between the two likely to be the most?

1. A publicly traded firm widely held by individual shareholders and managers also hold little stock in the firm
2. A publicly traded firm with widely dispersed by very active institutional stockholders.
3. A privately owned business where the owner is the manager
4. A publicly traded firm that is held by institutions but where the largest shareholder is also the CEO.