To reduce the agency costs, Black Lion has decided to improve the monitoring system of the company. This new upgraded system tracks all the decisions made by the CEO and provide daily report to the board of directors. What are the possible consequences of this decision?

1. The manager will take more conservative decisions.
2. The manager will accept projects with negative NPVs.
3. Conflict of interests between the manager and shareholders will decrease.
4. Shareholders are informed less regarding the daily activities of the company.

Group of answer choices

II and III

I and III

II and III and IV

I and IV

I and II and III

III and IV

II

I and II