The Limits and Logic of Agency Theory in Company Law (Routledge Research in Corporate Law)

Synopsis

Agency theory is ubiquitous in company law. This book explores (a) the limits of such deployment, and (b) the logic of how to deploy it.The book makes five linked arguments in respect of the limits of agency theory in company law. First, it argues that agency theory has become so broad that it can be used to analyse most human relationships. Such breadth, though, comes at the expense of legal clarity: as agency relationships cover such a broad range of relationships, there are no normative legal conclusions that can be drawn merely from identifying such a relationship. Second, it argues that we need to differentiate more specific concepts with clearer legal implications, such as externalities, and the particular manifestation of moral hazard that appears in insurance dynamics. Third, it argues that considerable amounts of existing company law theory - which is ostensibly built from agency theory - is in fact based on a series of hidden value judgments at each stage of the analysis. Fourth, it argues that company law theory should use agency theory less to rebalance the discipline: agency theory has become hegemonic, which is dangerous for the discipline, obscures company law’s role in establishing incentives, undermines accountability, and reduces company law’s autonomy.The book then moves to the logic of agency theory and makes three arguments. First, it argues that we need to factor in the company, only apply agency theory to voluntary interactions, and foreground our value judgments when identifying agency relations to do it properly. Second, it argues that it is rational to incur agency costs when we perceive the benefits of doing so to outweigh the costs, meaning that agency costs can be facilitative and we should look to front-end them rather than universally minimise them. Third, it argues that this needs to be undertaken through mandatory laws.Exploring the external limits and internal logic of agency cost analysis, this book will be of interest to academics, students, and researchers of corporate and company law.

Copyright:

2025

Book Details

Book Quality:

Publisher Quality

ISBN-13:

9781040131633

Related ISBNs:

9781040131602, 9781032275406, 9781003293828

Publisher:

Taylor & Francis

Date of Addition:

09/12/24

Copyrighted By:

Jonathan Hardman. The right of Jonathan Hardman to be identified as author of this work has been asserted in accordance with sections

Adult content:

No

Language:

English

Has Image Descriptions:

No

Categories:

Nonfiction, Business and Finance, Law, Legal Issues and Ethics

Submitted By:

Bookshare Staff

Usage Restrictions:

This is a copyrighted book.