Standing on Principals

By |2016-11-17T16:01:14-04:00January 25th, 2016|Categories: Global Market Update|Tags: , , |

Do we have too many principals? Principal-Agent Illustration. Source: Wikipedia. 40 years ago we didn’t. That’s when several researchers described the “agency problem,” where principals own the assets, but agents make the decisions. This can lead to conflicts, like when executives decide commercial air travel is too inconvenient, so they buy a corporate jet instead. Who decides whether the jet is a productivity tool or a luxury? When executives use corporate resources for cushy perks, it’s bad [...]