While Jensen and Meckling’s 1976 seminal work explores key aspects of the principal-agent relationship between owners and managers, they do not examine the principal’s decision on whether to hire the agent. An owner (principal) of a closely held firm can either hire someone to manage her...

This paper surveys the literature criticizing the view that managers should run companies aiming to create shareholder value by maximizing stock prices. Based on a multidisciplinary approach, I include empirical and theoretical papers from fields such as corporate law, management, finance,...

This research examines the effectiveness of Family Constitution or Family Protocol agreements in mitigating each type of agency conflict in family firms. We performed a qualitative analysis, through a case study, and found that the succession process is the main driver for implementing this...

If overstatements were a symptom of the agency conflict, pay-for-performance sensitivities should have increased in response to the additional penalties for misreporting imposed by SOX. Our finding of their decrease is inconsistent with the view that overstatements were an unintended consequence...

Institutional common ownership of firm pairs in the same industry increases the likelihood of a preexisting social connection among their CEOs. We establish this relationship using a quasi-natural experiment that exploits institutional mergers combined with firms’ hiring events and detailed...

We empirically examine two competing claims: first, if a firm's Corporate Social Responsibility (CSR) activity is driven by its CEO's private rent extraction (i.e. an agency problem), firms with higher CSR ratings are poorly governed and their managers are less likely to be dismissed for poor...

Leadership behaviors of wildland firefighting teams engaged in firefighting activities are “shared” despite the existence of a highly bureaucratic and hierarchical organizational structure. This paradoxical type of leadership appears to be based on individual perceptions of the effectiveness...

We examine whether corporate governance matters for firms facing financial distress by investigating the failure rate of Internet firms after the Internet shakeout. We theorize that financial crisis changes the relative costs and benefits of governance mechanisms. As a result, we suggest that...

Corporate governance is a recent concept that encompasses the costs caused by managerial misbehavior. Corporate governance is concerned with how organizations in general, and corporations in particular, produce value and how that value is distributed among the members of the corporation, its...

Research on the nature and value of firms’ dynamic capabilities has produced contradictory propositions and findings. Scholars have argued that contingency theorizing has the potential to improve our understanding, as the context in which dynamic capabilities are deployed may affect their...