Chief Executives and Chief Shareholders: Never the Twain Shall Meet?
Written by Jay Turo on Monday, September 16, 2013
Small business owners normally lead what are the most efficient and effective organizations ever designed by human hands: profit-seeking businesses where the chief executive also happens to be the chief (as in, largest) shareholder, too.
This has its benefits, chief among them that it avoids the agency problem, where the interests of the professional managers do not always sync and align with those of the shareholders.
In most circumstances, what is best for the managers of a small business is what is best for its shareholders, as they are normally one and the same.
But there are scenarios where this is decidedly not the case.
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