QUESTION $2$

$[4$ MARKS$]$

Corporate governance aims to safeguard the interests of shareholders and stakeholders while ensuring the longterm viability of enterprises. The agency theory and the agency problem that results from it are at the forefront of the theories that help to shape corporate governance. The agency theory primarily focuses on the distinction between the interests of the company's shareholders $($principals$)$ and the board of directors $($agents$).$ The Chief Executive Officer $($CEO$)$ chosen by the Board of Directors and senior management could be in a similar circumstance. In this situation, top managers selected by the Board of Directors serve as principals and agents.

The agency hypothesis contends that because the principals and the agents have different interests, the agents take actions that are at odds, with the principals' objectives. In businesses, this condition leads to agency issues. The agency problem, which results from conflicts of interest between the principal and the agent, can have a variety of causes.

$\backslash$table$[[$REQUIRED$,$MARKS$],[$Identify any FOUR $(4)$ reasons for$/$causes of the agency problem,$4]]$