TITLE:
A Discussion of the Suitability of Only One vs More than One Theory for Depicting Corporate Governance
AUTHORS:
Abdullah Al Mamun, Qaiser Rafique Yasser, Md. Ashikur Rahman
KEYWORDS:
Corporate Governance; Agency Theory; Stakeholder Theory; Stewardship Theory and Institutional Theory
JOURNAL NAME:
Modern Economy,
Vol.4 No.1,
January
30,
2013
ABSTRACT: Agency theory predicts that the Chief Executive Officer (CEO) and the chairman positions should be held by different individuals in order to protect shareholder’s interest. Though there are mixed evidences on CEO duality and firm performance, most research have found that there is negative relationship between CEO duality and firm performance. Although, in the last decades of the twentieth century, agency theory became the dominant force in the theoretical understanding of corporate governance, it does not however cover all aspects of corporate governance. This paper aims to explore whether it is better to combine various theories in order to describe effective and good corporate governance or theorizing corporate governance based on one theory only. This will cover corporate governance theories which include agency theory, stakeholder theory, stewardship theory, and institutional theory.