Putting the good back in good corporate governance: The presence and problems of double-layered agency theory

Corporate Governance: An International Review

Volumn 21, Issue 5, 2013, Pages 420-435

  Raelin, Jonathan D ^a   Bondy, Krista ^b  

^a GEORGE WASHINGTON UNIVERSITY   (United States)

^b UNIVERSITY OF BATH   (United Kingdom)

Author keywords

Agency theory; Corporate governance; Institutional theory; Managerialism; Responsible governance

Indexed keywords

EID: 84881333089     PISSN: 09648410     EISSN: 14678683     Source Type: Journal    
DOI: 10.1111/corg.12038     Document Type: Article

References (82)

1. Arora, P. & Dharwadkar, R. 2011. Corporate governance and corporate social responsibility. Corporate Governance: An International Review, 19: 136-152.
2. Bainbridge, S. M. 2002. Board of directors as nexus of contracts. Iowa Law Review, 88: 1-36.
3. Bebchuk, L. A. 2005. The case for increasing shareholder power. Harvard Law Review, 118: 833-914.
4. Bentham, J. 1789. The principles of morals and legislation. Oxford: Clarendon.
5. Berle, A. A. & Means, G. C. 1932. The modern corporation and private property. New York: Harcourt, Brace, & World.
6. Black, B. S. 1990. Passivity reexamined. Michigan Law Review, 89: 520-608.
7. Boatright, J. R. 1994. Fiduciary duties and the shareholder-management relation: Or, what's so special about shareholders? Business Ethics Quarterly, 4: 393-407.
8. Bondy, K., Matten, D., & Moon, J. 2004. The adoption of voluntary codes of conduct in MNCs. Business and Society Review, 109: 449-477.
9. Boyd, B. K., Haynes, K. T., & Zona, F. 2011. Dimensions of CEO-board relations. Journal of Management Studies, 48: 1892-1923.
10. Carlos, A. & Nicholas, S. 1990. Agency problems in early chartered companies: The case of the Hudson's Bay Company. Journal of Economic History, 50: 853-875.
11. Clarke, T. 2005. Accounting for Enron: Shareholder value and stakeholder interests. Corporate Governance: An International Review, 13: 598-612.
12. Clegg, S. 2010. The state, power, and agency. Journal of Management Inquiry, 19: 4-13.
13. Cohen, J. & Arato, A. 1994. Civil society and political theory. Cambridge, MA: MIT Press.
14. Conyon, M. J. & Schwalbach, J. 2000. Executive compensation: Evidence from the UK and Germany. Long Range Planning, 33: 504-526.
15. Cuevas-Rodríguez, G., Gomez-Mejia, L. R., & Wiseman, R. M. 2012. Has agency theory run its course? Making the theory more flexible to inform the management of reward systems. Corporate Governance: An International Review, 20: 526-546.
16. Curtin, D. 2003. Private interest representation or civil society deliberation? A contemporary dilemma for European Union Governance. Social & Legal Studies, 12: 55-75.
17. Cyert, R. M., Kang, S. H., & Kumar, P. 2002. Corporate governance, takeovers, and top-management compensation: Theory and evidence. Management Science, 48: 453-469.
18. Daily, C. M., Dalton, D. R., & Cannella Jr, A. A. 2003. Corporate governance: Decades of dialogue and data. Academy of Management Review, 28: 371-382.
19. Dalton, D., Hitt, M. A., Certo, S. T., & Dalton, C. M. 2007. The fundamental agency problem and its mitigation. Academy of Management Annual Reviews, 1: 1-64.
20. Davis, G. F. & Thompson, T. A. 1994. A social movement perspective on corporate control. Administrative Science Quarterly, 39: 141-173.
21. Deakin, S. 2005. The coming transformation of shareholder value. Corporate Governance: An International Review, 13: 11-18.
22. Devinney, T. 2009. Is the socially responsible corporation a myth? Academy of Management Perspective, 23(2): 44-57.
23. Devinney, T. 2011. Social responsibility, global strategy, and the multinational enterprise. Global Strategy Journal, 1: 329-344.
24. Dickinson, D. & Villeval, M. 2008. Does monitoring decrease work effort? Games and Economic Behavior, 63: 56-76.
25. Donaldson, T. 2007. Ethical blowback: The missing piece in the corporate governance puzzle. Corporate Governance, 7: 534-541.
26. Donaldson, T. & Dunfee, T. W. 1994. Toward a unified conception of business ethics: Integrative social contracts theory. Academy of Management Review, 19: 252-284.
27. Eichenwald, K. 2002. The nation white-collar defence stance: The criminal-less crime. The New York Times, March 3. Retrieved from http://www.nytimes.com/2002/03/03/weekinreview/the-nation-white-collar-defense-stance-the-criminal-less-crime.html
28. Eisenhardt, K. M. 1989. Agency theory. Academy of Management Review, 14: 57-74.
29. Estes, R. 1996. Tyranny of the bottom line. San Francisco, CA: Berrett-Koehler Publishers.
30. Fama, E. F. 1980. Agency problems and the theory of the firm. Journal of Political Economy, 88: 288-307.
31. Fama, E. F. & Jensen, M. C. 1983. Separation of ownership and control. Journal of Law & Economics, 26: 301-325.
32. Fernández, C. & Arrondo, R. 2005. Alternative internal controls as substitutes of the board of directors. Corporate Governance: An International Review, 13: 856-866.
33. Ghoshal, S. 2005. Bad management theories are destroying good management practices. Academy of Management Learning & Education, 4: 75-91.
34. Godfrey, P. C. & Hatch, N. W. 2007. Researching corporate social responsibility. Journal of Business Ethics, 70: 87-98.
35. Greenwood, R. & Hinings, C. R. 1996. Understanding radical organizational change: Bringing together the old and new institutionalism. Academy of Management Review, 21: 1022-1054.
36. Griffin, J. J. & Mahon, J. F. 1997. The corporate social performance and corporate financial performance debate. Business & Society, 36: 5-31.
37. Hayek, F. A. 1945. The use of knowledge in society. American Economic Review, 35: 519-530.
38. Heath, J. 2009. The uses and abuses of agency theory. Business Ethics Quarterly, 19: 497-528.
39. Hill, J. G. 2010. The rising tension between shareholder and director power in the common law world. Corporate Governance: An International Review, 18: 344-359.
40. Hopt, K. 1984. New ways in corporate governance: European experiements with labor representation on corporate boards. Michigan Law Review, 82: 1338-1363.
41. Hoskisson, R. E., Castleton, M. W., & Withers, M. C. 2009. Complementarity in monitoring and bonding. Academy of Management Perspectives, 23(2): 57-74.
42. Jensen, M. C. 1994. Self-interest, altruism, incentives, and agency. Journal of Applied Corporate Finance, 7(2): 40-45.
43. Jensen, M. C. 2002. Value maximization, stakeholder theory, and the corporate objective function. Business Ethics Quarterly, 12: 235-256.
44. Jensen, M. C. 2005. Agency costs of overvalued equity. Financial Management, 34: 5-19.
45. Jensen, M. C. 2012. The foundations and future of agency theory. Speech delivered at the Academy of Management Annual Meeting, Boston, MA, August.
46. Jensen, M. C. & Meckling, W. H. 1976. Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Financial Economics, 3: 305-360.
47. Jensen, M. C. & Murphy, K. J. 2004. Remuneration: Where we've been, how we got to here, what are the problems, and how to fix them. Working paper no. 44/2004, Harvard Business School. Boston, MA.
48. Jones, T. & Hunt, III, R. O. 1991. The ethics of management buy-outs revisited. Journal of Business Ethics, 10: 833-840.
49. Judge, W. Q. 2009. Editorial - Toward a global theory of corporate governance. Corporate Governance: An International Review, 17: iii-iiv.
50. Judge, W. Q., Gaur, A., & Muller-Kahle, M. I. 2010. Antecedents of shareholder activism in target firms. Corporate Governance: An International Review, 18: 258-273.
51. Kaen, F. R., Kaufman, A., & Zacharias, L. 1988. Political values and agency theory: A perspective. Journal of Business Ethics, 7: 805-820.
52. Kassinis, G. & Vafeas, N. 2006. Stakeholder pressures and environmental performance. Academy of Management Journal, 49: 145-159.
53. Kidwell, R. E., Jr & Bennett, N. 1993. Employee propensity to withhold effort. Academy of Management Review, 18: 429-456.
54. Lan, L. L. & Heracleous, L. 2010. Rethinking agency theory: The view from law. Academy of Management Review, 35: 294-314.
55. Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. 2009. The interdependence of private and public interests. Organization Science, 20: 1034-1052.
56. McConnell, J. & Servaes, H. 1990. Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27: 595-612.
57. Mickels, A. 2009. Beyond corporate social responsibility. Hastings International and Comparative Law Review, 32: 271-304.
58. National Audit Office 2012. Maintaining the financial stability of UK banks: Update on the support schemes. London: National Audit Office.
59. O'Rourke, A. 2003. A new politics of engagement: Shareholder activism for corporate social responsibility. Business Strategy and the Environment, 12: 227-239.
60. Ohta, T. 2006. Public benefit organizations in Japan. International Journal of Civil Society Law, 4(4): 72-90.
61. Orlitzky, M., Schmidt, F. L., & Rynes, S. L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24: 403-441.
62. Palazzo, G. & Scherer, A. G. 2006. Corporate legitimacy as deliberation: A communicative framework. Journal of Business Ethics, 66: 71-88.
63. Perrow, C. 1986. Complex organizations. New York: Random House.
64. Pitelis, C. N. 2004. Corporate) governance, (shareholder) value and (sustainable) economic performance. Corporate Governance: An International Review, 12: 210-223.
65. Poitras, G. 1994. Shareholder wealth maximization, business ethics and social responsibility. Journal of Business Ethics, 13: 125-134.
66. Quinn, D. & Jones, T. 1995. The agent morality view of business policy. Academy of Management Review, 20: 22-42.
67. Rothe, D. 2006. Iraq and Halliburton. In R. J. Michalowski & R. C. Kramer (Eds.), State-corporate crime: 215-238. New Brunswick, NJ: Rutgers University Press.
68. Royal College of Nursing 2010. New foundations: The future of NHS trust providers. RCN Policy Unit. Retrieved from http://www.rcn.org.uk/__data/assets/pdf_file/0006/314619/05.10_New_Foundations_the_future_of_NHS_Trust_Providers_Report.pdf
69. Seal, W. 2006. Management accounting and corporate governance: An institutional interpretation to the agency problem. Management Accounting Research, 17: 389-408.
70. Shapiro, S. P. 2005. Agency theory. Annual Review of Sociology, 31: 263-284.
71. Shavell, S. 1979. Risk sharing and incentives in the principal and agent relationship. Bell Journal of Economics, 10: 55-73.
72. Stout, L. 2002. Bad and not-so-bad arguments for shareholder primacy. Southern California Law Review, 75: 1189-1209.
73. Thomsen, S. & Pedersen, T. 2000. Ownership structure and economic performance in the largest European companies. Strategic Management Journal, 21: 689-705.
74. Tourish, D., Craig, R., & Amernic, J. 2010. Transformational leadership education and agency perspectives in business school pedagogy. British Journal of Management, 21: s40-s59.
75. Turker, D. 2009. Measuring corporate social responsibility: A scale development study. Journal of Business Ethics, 85: 411-427.
76. Walsh, J. P. & Seward, J. K. 1990. On the efficiency of internal and external corporate control mechanisms. Academy of Management Review, 15: 421-458.
77. Ward, A. J., Brown, J. A., & Rodriguez, D. 2009. Governance bundles, firm performance, and the substitutability and complementarity of governance mechanisms. Corporate Governance: An International Review, 17: 646-660.
78. Ward, D. & Filatotchev, I. 2010. Principal-principal-agency relationships and the role of external governance. Managerial and Decision Economics, 31: 249-269.
79. West, A. 2009. Corporate governance convergence and moral relativism. Corporate Governance: An International Review, 17: 107-119.
80. Westphal, J. D. & Khanna, P. 2003. Keeping directors in line: Social distancing as a control mechanism in the corporate elite. Administrative Science Quarterly, 48: 361-398.
81. Westphal, J. D. & Zajac, E. J. 1995. Who shall govern? CEO/board power, demographic, similarity, and new director selection. Administrative Science Quarterly, 40: 60-83.
82. Zajac, E. J. & Westphal, J. D. 2004. The social construction of market value. American Sociological Review, 69: 433-457.