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Sir I am absolutely befuddled when I checked the answer section of this past paper especially referring to 1)a)i) here it says that principal is board of trustees and management board is agent.
However what I WROTE was donors and legacies(tho dead but still thought to include them anyway) are principals and agent like the examiner- management board.
So are both answers correct? Or I am clearly wrong?
And if I am wrong, should I deduce that in 2 tier structure, regardless of organisation type, supervisory board is principal and agent- management board?
and in case of unitary structure, EDs/management is agent? donors/shareholders principal? So in other words, if BCO had unitary structure, I would have been CORRECT in saying that donors are principal and management board is agent?
Donors are not the principals. They have no formal place in the structure.
It’s like saying that customers are the principals of a shop. Customers/donors can withhold their money but they are not part of management. Shareholders are principals because directors must act in their best interests.
But, I agree, this is a confusing question and I think you would have done OK using your approach.
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