What is the principal-agent problem?

Context
This week as in week 7 and 8 we are again dealing with the challenges presented by employment contracts and the agency problem.  In 2016 knowledge of fraud over sale practices in the consumer banking division became widely known.  Even with 3 changes in CEOs and multiple efforts to improve governance, Wells Fargo is facing another scandal in 2022, “Wells Fargo Gamed the System in Investor Arbitration, Judge Says,” WSJ 2/4/22. By selecting arbitrators pre-disposed to the corporation, Wells Fargo managed to short- changed the investors who had already suffered major losses due the fraud.
On September 13, 2021, Senator Elizabeth Warren sent FED Chair Jerome Powell a letter https://www.warren.senate.gov/imo/media/doc/Letter%20from%20Senator%20Warren%20to%20Fed%20on%20Wells%20Fargo%20FHC%20Status%2009.13.2021.pdf
In the letter she wrote “Under Janet Yellen’s leadership, the Fed placed Wells Fargo under an asset cap in 2018 due to its ‘widespread consumer abuses and other compliance breakdowns.  In the three years since then, numerous additional revelations have surface about Wells Fargo’s continued unethical and anti-consumer conduct. These new revelations have once again made clear that continuing to allow this giant bank with a broken culture to conduct business in its correct form poses substantial risks to consumers and the financial system”  Senator Warren goes on to ask that the FED revoke Wells Fargo’s status as a financial holding company. The action would require Wells Fargo to separate its consumer bank subsidiary from its other financial activities.
Wells Fargo is an enormous financial services company with $1.9 trillion in assets.  It serves 1 in 3 US households and 10% of US small business.  In reply to Senator Warren’s demand Well Fargo replied, https://newsroom.wf.com/English/news-releases/news-release-details/2021/Wells-Fargo-Affirms-Focus-on-Building-Strong-Risk-and-Control-Foundation/default.aspx
In its reply it cites progress achieve under the new CEO Charles Scharf, including: 1) three business group have been split into five; 2) it has created four new functions to provide greater oversight and transparency;  3) it has brought on board 10 new Operating Committee members out of the total committee of 17; 4) created a new team design to facilitate oversight of consumer practices; 5) created new enterprise wide risk assessment with the intent to design new controls; 6) “Implemented a new incentive plan for bank branches that is governed by stronger oversight and controls, and focused on customer relationships.”  Emphasis added by Dr. Isley.
Instructions
The FED continues to maintain that Wells Fargo has not done enough to rein in the incentive failures that revealed the frailty of its corporate governance. We have seen that several of the largest conglomerate in the US decide that it is time to divide their agglomerated groups into smaller units for focus and function.  J & J will separate it consumer products division and its pharmaceutical division.  GE will divide into three units; aviation; energy, and healthcare.  Is it time for Wells Fargo to separate its consumer banking business from its other enterprises? YES NO Explain
What is the principal-agent problem?
What is the role of corporate governance?
How is corporate culture different than governance?
Can incentive systems align culture with governance?
How might separating Wells Fargo’s consumer banking business from its other enterprises improve depositor safety?

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