Toward a more robust theory of agency: Three corporate governance essays

Despite agency theory's general dominance of the corporate governance literature, an increasing number of researchers have criticized the theory for its strict assumptions and have suggested that it does not adequately reflect many corporate governance realities. This dissertation seeks to advance the bounds of agency theory through investigating several aspects of the theory which have thus far been largely ignored in the management literature.;In the second chapter, the role that fiduciary duties play as a governance device during bankruptcy is investigated. During bankruptcy the fiduciary duty of corporate executives and directors is primarily due to creditors rather than shareholders. Despite this, the corporate elite heading these firms continue to work in a governance structure built largely to reinforce behavior directed in the interest of shareholders. This presents an interesting dilemma to managers and directors as their legal duty pulls them one way while many governance forces push them in the other direction. The empirical results suggest that aspects of the prior governance and ownership structure of the firm can indeed make it more difficult for agents to fulfill their fiduciary duties during bankruptcy.;Finally, agency theory has focused much of its attention on how principals manage their agents---for example, how compensation arrangements or board monitoring affect firm performance by modifying agent behavior. Much less attention has been paid to how agents actively manage their principals. Drawing on agency theory and resource dependence theory, the third chapter outlines a typology of "owner management" strategies and develops propositions surrounding owner, manager, and situational effects on owner management.;In the first chapter, agency theory is extended to consider the issue of principal opportunism toward agents, focusing primarily on the relationship between firm owners and top managers. While most agency literature takes a principal-centric approach to investigating the agency relationship and assumes that all agency problems stem from opportunistic behavior by agents, this chapter considers the governance implications that would result if the theory were to allow principals to act opportunistically against agents.