Contemporary issues in Accounts and Finance

The separation of ownership and control in a modern corporation often requires the delegation of significant decision-making authority to professional managers, which introduces the possibility that managers will have incentives to make decisions that benefit them at the expense of stockholders (Byrd, Parrino and Pritsch, 1998).

Discuss the types of manager-stockholder conflict that exist and the various mechanisms to mitigate such problems, drawing insights from relevant theories and empirics from the literature.