Corporate governance in the digital era: resolving agency conflicts for sustainable profitability at Microsoft

In modern corporations, the relationship between management and shareholders plays a major role in shaping business outcomes. This paper study the conflict between management's strategic initiatives and shareholders' pursuit of profit maximization via exploring the question that whether firms invariably prioritize profitability. The paper explores the principal-agent problem and its effect on corporate performance to find out how information asymmetry and divergent goals between executives and shareholders can result in an inefficiency. The analysis is concentrated on Microsoft's governance mechanisms, including its board structure, equity incentives, and a set of ESG-related KPIs, to develop hybrid strategies that can fit for practical solutions with shareholder interests. The paper is also on broader debates in corporate governance, such as the critique of Friedman’s profit maximization doctrine and stakeholder-oriented approaches for contextualization of Microsoft’s operating margin in the cloud computing market...