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Directors of organisations are given the mandate to manage funds on behalf of shareholders for the achievement of the organisational purpose. In doing so directors are delegated (Jensen and Meckling, 1976) to manage the conflicting interests of several stakeholders.
Directors are compensated for their role. Such compensations, though, may not be necessarily aligned with organisation’s success, thus preventing the best choice of strategy for the purpose and increasing rather than diminishing the role of self-interests.
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