agency design

Agency design refers to how an organization structures and aligns the relationships between its owners (shareholders) and managers to ensure that goals are effectively achieved. It involves creating systems, incentives, and governance mechanisms that motivate managers to act in the best interest of the owners, minimizing conflicts of interest. Proper agency design helps balance decision-making authority, monitoring, and accountability, ensuring that the organization operates efficiently and ethically while aligning management actions with the owners' objectives.