scholarly journals Controversies about agency theory as theoretical basis for corporate governance

2016 ◽  
Vol 7 (4) ◽  
pp. 613
Author(s):  
Jan Kultys
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Theoretical Basis ◽  
Corporate Law ◽  
Management Theory ◽  
Traditional Theory ◽  
Stewardship Theory ◽  
Ongoing Debate ◽  
Shareholder Primacy ◽  
Efficient Management

The issue of corporate governance is being taken up by different branches of science. Particular views on the nature and goals of a firm, as well as on corporate law, determine various approaches to the issue. The ongoing debate on corporate governance is being stimulated by notorious scandals and economic crises. The agency theory (prevailing today), which assumes egoism and pursuit of one’s own interests, forms the basis for shareholder primacy model, while team production theory forms the basis for director primacy model. Stewardship theory, which assumes convergence of management’s and stakeholders’ interests, may be competing or complementary towards the agency theory, depending on situation. According to management theory, efficient management requires law regulation of managers’ status. This paper is aimed at presenting controversies about traditional agency theory as theoretical basis for corporate governance, as well as at discussing other perspectives on the issue, which are extensions of the traditional theory or are based on substantially different premises. The analysis shows that going beyond agency theory allows for better understanding of the whole range of models of corporate governance as well as of the changes that are being proposed in the area. The method utilized in this paper is descriptive and comparative in character.

scholarly journals Stewardship theory: is board accountability necessary?

2017 ◽  
Vol 59 (6) ◽  
pp. 1292-1314 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Design Methodology ◽  
Agency Problems ◽  
Stewardship Theory ◽  
Content Type ◽  
General Terms ◽  
Practical Implications

Purpose The purpose of the paper is to demonstrate that notwithstanding the fact that stewardship theory embraces things like trust of directors, their professionalism, loyalty and willingness to be concerned for the interests of others, as well as rejecting the foundations of classic agency problems that are asserted by agency theory, board accountability is as relevant to stewardship theory as it is to agency theory. Design/methodology/approach The paper applies the theory underlying board accountability in corporate governance, which is so often applied both in the corporate governance literature and in practice with agency theory in mind, to stewardship theory. Findings While the idea of accountability of boards is generally associated with an explanation and conceptualisation of the role and behaviour of directors as agents within classic agency theory, the paper demonstrates that board accountability is a necessary part of board life even if the role of directors is explained and conceptualised in terms of stewardship theory. Practical implications The paper suggests some accountability mechanisms that might be employed in a stewardship approach. Originality/value While many authors have talked in general terms about board accountability and its importance, this is the first paper that has engaged in a substantial study that links board accountability directly with stewardship theory, and to establish that accountability is necessary.

scholarly journals Classical and modern concepts of corporate governance (Stewardship Theory and Agency Theory)

Management ◽  
2015 ◽  
Vol 19 (2) ◽  
pp. 84-92 ◽  
Author(s):  
Beata Glinkowska ◽  
Bogusław Kaczmarek
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Supervisory Board ◽  
Stewardship Theory ◽  
Social Meaning ◽  
Modern Approach ◽  
Management Board ◽  
Governance Systems ◽  
Supervisory Boards ◽  
A Company

Summary The main issues in efficiency of a company as an organisation are relations between the Supervisory Board and the Management Board of a company, and the methods of functioning of Supervisory Boards in governance systems of a company. The classical and modern approach to the role, place, and importance of corporate governance presented in this article, is yet another prompt to continue searching for the optimum in the organisational, economical, and social meaning.

scholarly journals Resilience: the resumption of shareholder primacy

2008 ◽  
Vol 5 (2) ◽  
pp. 146-151
Author(s):  
Alex Proimos
Keyword(s):  
Corporate Governance ◽  
Stakeholder Theory ◽  
General Public ◽  
Corporate Law ◽  
Shareholder Primacy

The once dominant and inconsiderate player in corporate governance, the shareholder, has faced increasing pressure from its rival stakeholders (creditors and the general public) and their agents (i.e. the management and directors) eager to unproportionately increase their stake. The idea of shareholder primacy in corporate governance is while previously was losing its dominance as corporate law versus stakeholder theory could be set for an even stronger come back.

SCG and Corporate Law Theory

2019 ◽  
pp. 13-34
Author(s):  
Anita Indira Anand
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Agency Costs ◽  
Conflicts Of Interest ◽  
Active Role ◽  
Corporate Law ◽  
Agency Relationship ◽  
The Public ◽  
Public Corporation ◽  
And Control

This chapter discusses the existing conception of the public corporation and questions whether any of these ideas appropriately account for the rise of shareholder-driven corporate governance (SCG). In particular, it considers the contractarian model of the corporation as well as the agency theory, which explains the division of ownership and control as an agency relationship that necessarily produces agency costs. The chapter also addresses a newer and contrasting idea called principal cost theory, which argues that principal (or shareholder) control also comes at a cost, resulting from shareholders’ lack of expertise and the potential for conflicts of interest among them. This theory offers an important counterpoint to the normative arguments for SCG because it emphasizes the potential failings of shareholders and challenges the supposition that they are necessarily well positioned to play an active role in governance.

scholarly journals Corporate Governance: An Overview. From Creation of Value for Shareholders by the Board to the Duality Role of Its Chairperson

2019 ◽  
Vol 8 (1) ◽  
pp. 40
Author(s):  
Michel Sayumwe
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Stakeholder Theory ◽  
Resource Dependence ◽  
Stewardship Theory ◽  
Theory Theory ◽  
Theoretical Perspectives

In this paper, we discuss the evolution of the literature on corporate governance based on many theoretical perspectives, including agency theory, stakeholder theory, theory of resource dependence and stewardship theory.

scholarly journals A corporate governance study on Italian family firms

2008 ◽  
Vol 5 (4) ◽  
pp. 93-103 ◽  
Author(s):  
Fabrizio Colarossi ◽  
Marco Giorgino ◽  
Roberto Steri ◽  
Diego Viviani
Keyword(s):  
Decision Making ◽  
Cluster Analysis ◽  
Corporate Governance ◽  
Agency Theory ◽  
Board Of Directors ◽  
Family Firms ◽  
Stewardship Theory ◽  
Italian Family ◽  
Governance Systems ◽  
The Board Of Directors

In this paper we investigate three corporate governance issues in 30 Italian family firms: (i) the orientation either to the Agency Theory or to the Stewardship Theory; (ii) the board of directors’ composition; (iii) the ability to involve nonfamily individuals in the company’s management and governance (Openness Index) and the decision-making quality (Extension Index) and we analyze empirical results through a cluster analysis by following the Gubitta and Gianecchini’s approach (2002). Our conclusion suggests that (i) small Italian family firms’ corporate governance systems seem to be consistent with the guidelines suggested by the Stewardship Theory and (ii) Italian family firms’ boards are characterized by a relevant presence of family members.

Corporate Governance and Performance of Organizations

2018 ◽  
Vol 9 (5) ◽  
pp. 439-446
Author(s):  
Hamid Ait lemqeddem ◽  
◽  
Mounya Tomas ◽  
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Theoretical Foundation ◽  
Quantitative Approach ◽  
Governance Practices ◽  
Deductive Method ◽  
Private And Public ◽  
Is Theory ◽  
And Performance ◽  
Do So

There is renewed interest in the need to focus on corporate governance in an environment where it is a performance imperative for all small and large organizations, private and public, beginner or established.The purpose of this study is to demonstrate the place of corporate governance practices in organizations to ensure that the board, officers, and directors take action to protect shareholder interests and all stakeholders. It is important to focus on the effect of these practices on improving performance and competitiveness. To do so, we opted for the hypothetico-deductive method with a quantitative approach. Our theoretical foundation is theory is agency theory.

Agency and Insanity

2018 ◽  
Author(s):  
Stephen P. Garvey
Keyword(s):  
Agency Theory ◽  
Mental Disease ◽  
Sense Of Agency ◽  
Traditional Theory ◽  
Alien Hand Syndrome ◽  
Mind And Body ◽  
Alien Hand ◽  
Title Character

66 Buffalo Law Review 123 (2018)This Article offers an unorthodox theory of insanity. According to the traditional theory, insanity is a cognitive or volitional incapacity arising from a mental disease or defect. As an alternative to the traditional theory, some commentators have proposed that insanity is an especially debilitating form of irrationality. Each of these theories faces fair-minded objections. In contrast to these theories, this Article proposes that a person is insane if and because he lacks a sense of agency. The theory of insanity it defends might therefore be called the lost-agency theory.According to the lost-agency theory, a person lacks a sense of agency when he experiences his mind and body moving but doesn’t experience himself as the author or agent of those movements. The title character in the movie Dr. Strangelove suffered from what’s known as alien hand syndrome. People suffering from this syndrome experience the moving hand as their hand but don’t experience themselves as the author or agent of its movements. The lost-agency theory portrays insanity as alien hand syndrome writ large. The insane actor is like someone possessed by an alien self. He’s not in charge of his mind or body when he commits the crime.

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