A new delegation design for EU governance: how preference cohesiveness of multiple principals shapes the European Commission’s discretion in trade negotiations

The Lisbon Treaty enhanced the role of the European Parliament in free trade agreements. This article offers a comprehensive theoretical and empirical account of this new delegation design in EU trade governance. Specifically, it addresses the question how the preference cohesiveness of multiple principals—the Council of Ministers as a de jure principal and the Parliament as a de facto principal—shapes the Commission’s discretion in negotiating trade agreements. Exploring these two conjectures through a combination of primary materials and interviews, this contribution posits that those configurations of low degree of cohesiveness within the Council and high cohesiveness within the Parliament or high cohesiveness of the Council and low cohesiveness within the Parliament increase Commission discretion. A configuration of low cohesiveness within and between multiple principals, by contrast, is more likely to lead to paralysis of the negotiation process.

State-owned enterprises’ corporate governance: Evidence from a Portuguese company

This paper analyses state-owned enterprises’ (SOEs) corporate governance, addressing whether there are differences between these and private enterprises that make it necessary to formulate a specific corporate governance theory for the former. This will be achieved through a case study based on Carris company, mitigating the lack of empirical knowledge in this field and taking a step forward by clearly proving what it is suggested by the literature: SOEs’ governance particularities actually influence their day-to-day business and financial viability. That helps to highlight the urgency to apply adequate corporate governance techniques to SOEs, more aligned with their characteristics. SOEs have a different legal status, more volatile operating goals, soft budget constraints, lack of public service contracts (and consequent mismatch of the corresponding compensatory allowances due for the public service provided), and different criteria for professional appointment and selection. More importantly, they suffer from multiple principals’ phenomenon: multiple principals, multiple problems. It is, therefore, recommended some changes regarding their corporate governance, such as the incorporation of the comply-or-explain principle; introduction of a code of best practices in the public managers’ appointment process; and contractual arrangements regarding the public service provided, with the multiannual allocation of the corresponding compensatory allowances.

Information Asymmetry among Multiple Principals and Inefficiency within the Organization

We develop a theoretical framework to investigate the effect of information asymmetry between the two principals on the common agent’s incentives to provide an effort. We find that the agent’s effort to the poorly-informed (PI) principal is optimal, while his effort to the well-informed (WI) principal is not. Given that the valuable resource, i.e., the agent’s effort, should flow into the person who has higher ability, our results imply that the asymmetric information between two principals generates an efficiency loss within the organization. In addition, we examine whether this inefficiency is attenuated by changes of the relative weight of the agent’s profit set to each principal. The result shows that unless the WI principal solely determines the agent’s profit, the efficiency loss within the organization does not disappear. This finding corroborates that as long as the PI principal exists within the organization, the inefficiency might be inevitable. Our research not only provides new insights to the agency literatures but also offers useful information regarding the efficiency of organizational structure.