Hiring someone to act in your interest doesn't guarantee they actually will
Whenever a principal hires an agent to act on their behalf — shareholders hiring a CEO, patients trusting a doctor — their interests rarely line up perfectly, and the principal can't watch every decision the agent makes. Economists Michael Jensen and William Meckling formalized this 'principal-agent problem' in 1976: agents often have both opportunity and incentive to serve themselves at the principal's expense, which is why so much corporate governance exists just to narrow that gap.