Agencyproblemsoccurwhenthereisaconflictofinterestbetweentheprincipal(suchasacompany'sshareholders)andtheagent(suchasthecompany'smanagement)whoishiredtoactontheprincipal'sbehalf.Theseproblemsarisebecausetheagentmayprioritizetheirowninterestsoverthoseoftheprincipal,leadingtoinefficienciesorfinanciallosses.Commonexamplesincludemanagerspursuingpersonalgains,excessiverisk-taking,orshirkingresponsibilities.Solutionstomitigateagencyproblemsincludeperformance-basedincentives,bettermonitoring,andaligningthegoalsofprincipalsandagents.Theseissuesarewidelystudiedincorporategovernance,economics,andfinance.
