Question

The board of directors had an important role in Luckin Coffee, but it claimed to be unaware of any problems. If true, this is an example of

Answer 1

If it was found that the Board of Directors for Luckin Coffee were truly unaware of any problems then this is an example of Information Asymmetry.

What would the Board of Directors be unaware of problems?

The Board of Directors are meant to be the oversight body that makes sure that the management of a company are acting in the interest of shareholders.

Sadly, they aren't involved in the day-to-day running of the business so won't possess the same information that management does.

This information assymetry means that they might be unaware of when certain things go wrong as was the case with Luckin Coffee.

Find out more on Information Asymmetry at brainly.com/question/15345064.