Yelena, the CEO of Andron Inc., reports to the board of directors appointed by the shareholders of Andron. Based on shareholder suggestions, the board ties Yelena's compensation to the performance of Andron. Due to this pressure, Yelena begins devoting extra time to projects and undertakes other activities to ensure that she has job security and that she receives adequate compensation. The reasons why the board ties Yelena's compensation to firm performance is to overcome
A. inside director-outside director conflict.
B. principal-agent problem.
C. shareholder capitalism scenario.
D. fiduciary responsibility oversight.
Answer: B
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Indicate whether the statement is true or false