Which of the following is not part of the agency relationship?

Question

BlackTom AI · Accepted Answer

We begin by identifying the core concept: an agency relationship involves a principal who authorizes an agent to act on the principal's behalf, typically in dealings with third parties. Now we evaluate each option.
Option 1: General public. The general public is not a party to the agency relationship itself. The relationship is typically strictly between the principal and the agent, and any third parties with whom they interact are external to the agency construct unless they are the designated third-party actor in a specific transaction. Thus, the general public is not a formal participant in the agency relationship.
Option 2: Stockholders. In many corporate contexts, stockholders rely on management to act as agents for the shareholders’ interests. Management, as officers or agents of the corporation, is commonly described as the agent of the stockholders (the principals). Therefore, stockholders are indeed tied to the agency framework, not excluded from it.
Option 3: Management. Management typically acts as the agent of the stockholders (or the principals) and has a fiduciary duty to represent the principals’ interests in running the company. This is a textbook example of an agent within the agency relationship, so management is part of that relationship.
In summary, among the options, the one that is not part of the agency relationship is the general public, since the agency relationship is primarily between a principal and an agent, with third parties who interact in specific transactions rather than a broad, non-participatory group like the general public. The other two options describe actors who commonly serve as agents or principals within organizational structures.

Which of the following is not part of the agency relationship?

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