[Section A] True or False: In the context of corporate governance, 'Agency Theory' suggests that the interests of the directors (agents) and the shareholders (principals) are naturally perfectly aligned.

Agency Theory is built on the premise that there is a separation of ownership and control. Because directors manage the company on behalf of shareholders, there is a risk they will pursue their own goals (e.g., higher bonuses, empire building) rather than maximizing shareholder value. This misalignment is the 'agency problem'.