was true of the English East India Company, the VOC's biggest challenge was the principal-agent problem: the tendency of its men on the spot to trade on their own account, bungle transactions or simply defraud the company.
The English East India Company faced significant operational challenges, particularly from the behavior of its agents and employees working in distant territories. These individuals sometimes prioritized their personal financial interests over the company's objectives, which led to issues such as mismanagement of transactions and outright dishonesty. This situation underscores the broader concept known as the principal-agent problem, where the goals of those in control diverge from those acting on their behalf.
Similarly, the Dutch East India Company (VOC) encountered the same difficulties. The actions of local agents could undermine the company's goals, impacting profitability and efficiency. Niall Ferguson, in "The Ascent of Money," illustrates how this issue was not unique to one company but was a prevalent challenge in managing distant trade operations, raising questions about trust and accountability in business dealings of that era.
