What is the principal-agent problem

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The FED continues to maintain that Wells Fargo has not done enough to rein in the incentive failures that revealed the failure of it corporate governance. We have seen that several of the largest conglomerate in the US decide that it is time to divide their agglomerate groups into smaller units for focus and function. J & J will separate it consumer products division and its pharmaceutical division. GE will divide into three units; aviation; energy, and healthcare. It is time for Wells Fargo to separate it's banking business from it's other enterprises? YES NO Explain

-What is the principal-agent problem?

-What is the role of corporate governance?

-How is corporate culture different than governance?

-Can incentive systems align culture with governance?

-How might separating Wells Fargo's banking business from it's other enterprises improve depositor safety?

Reference no: EM133065120

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