In General, When Governance Mechanisms Are Strong, Managers Have Free

question 83

True/False

In general, when governance mechanisms are strong, managers have free rein in their decisions.

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Definitions:

Principal

The amount of money originally invested or loaned, on which basis interest and returns are calculated.

Agent's Contract

A legal agreement that specifies the rights and obligations of an agent acting on behalf of another party, the principal.

Bound

Being legally or morally obligated to do something or restricted by some form of constraint.

Ratify

To formally approve or confirm an agreement or treaty, making it officially valid.