But, threat of financial penalty, or non-payment of bonus can address adverse selection problems; hence the stick approach. The study has a number of implications for this sector. The skeptical attitude that many principals have about PCOs is understandable given both the experience imbalance between the principal’s staff member and the PCO staffer and the pecuniary nature of the relationship. The study revealed that the type of person assigned to organize a conference usually had limited prior experience, placing her at a knowledge disadvantage (Saam, 2007). Moreover, an inexperienced and possibly naıve principal may not know how to set criteria to select the best PCO and then evaluate those criteria effectively, leading to an enhanced chance of adverse selection. In addition, PCOs charge substantial amounts of money for their services. Many of these tasks are ‘back of house tasks’ that are not readily transparent to the principal.