A theoretical framework for corporate governance studies: agency theory assumptions

  • Laíse Ferraz Correia UFMG; CAD; NUFI; CEPEAD
  • Hudson Fernandes Amaral UFMG; Departamento de Ciências Administrativas
Keywords: Corporate Governance, Agency Theory

Abstract

The agency theory, an important theoretical framework in the area of corporate governance, was discussed as a contribution for development of this subject. The foundations, assumptions and building blocks of the agency theory, frequently used in research on this subject, are often only partially addressed. An effort was made to bridge this gap in governance studies by discussing pillars of the agency theory, that is to say, assumptions about the nature of human behavior in organizations, the way organizations allocate steps in the decision making process across agents, the relevance of specific knowledge required , the agency costs arising from diffusion of decision functions among rational agents with the specific knowledge required, and decision control mechanisms for opportunistic behavior of agents, were included. These essentials of the agency theory constitute the foundation for constructing corporate governance mechanisms directed to improved management and performance

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Published
2008-09-01
How to Cite
Correia, L., & Amaral, H. (2008). A theoretical framework for corporate governance studies: agency theory assumptions . REGE Revista De Gestão, 15(3), 1-10. https://doi.org/10.5700/issn.2177-8736.rege.2008.36642
Section
Administração Geral