Incompleteness of Agency Theory: Dark Matter in the US Corporation
Corporate Governance and Control Systems in the Public Corporation, Florence, Italy, April 2011
20 Pages Posted: 26 Oct 2012
Date Written: 2011
Prepared for a conference in Florence, Italy on “Corporate Governance and Control Systems in the Public Corporation,” this essay offers a current account and critique of corporate governance in the United States. The essay asserts that the control systems undertaken in the name of corporate governance – while numerous and convoluted – have not lived up to their promise. The essay postulates that these control systems are incomplete because they aim primarily at “external” agent conflicts, the focus of modern agency theory. Instead, “internal” agent conflicts – which arise from a lack of personal completeness and integrity – may well represent the “dark matter” that explains more fully the nature of the contemporary corporation.
Keywords: corporate governance, agency theory, public corporation, conflicts of interest, integrity
JEL Classification: B31, G30, K22, M14
Suggested Citation: Suggested Citation