Question

In a private company, directors may not be motivated to work very hard because shareholders decide on the directors’ remuneration.

True

False

Answer 1

True. In a private company, if the directors' remuneration is decided by shareholders and there is a disconnect or lack of oversight, directors may not feel motivated to work hard. This situation can arise if directors believe they are secure in their positions regardless of performance, leading to situations where they may not exert maximum effort. However, it's also important to note that the motivation of directors can depend on various factors, including their personal stakes in the company, company culture, and accountability measures in place.