Please choose either Question 1 or Question 2.

1. A central issue in corporate governance is the agency problem between management (agent) and shareholders (principal). Critically discuss the principal-agent problems and the various mechanisms that can be used to potentially mitigate them.

2. Some scholars hold the view that corporate governance models around the world are converging on the shareholder-oriented system most commonly practised in the US and UK. Others disagree and talk of continued divergence especially between the shareholder-oriented and the stakeholder-oriented models. Using appropriate examples, critically discuss these views.