Corporate governance and the financial crisis: did the theories stand the test?

Wen, S; Zhao, J

Abstract

Three key theories - the agency theory, stewardship theory and path dependence theory have served to explain the relationship between directors and shareholders in the field of cor-porate governance. However, none of the theories alone have stood the test of the global fi-nancial crisis.
· Given the multiplicity and complexity of directors' interests, directors in organisations are likely to have agency relationships with some managers and stewardship relationships with others.
· Path dependence theory indicates the prevalence of voluntary codes rather than man-datory instruments in the post-crisis context.
· In the authors' opinion, a combination of voluntary codes and mandatory instruments would be desirable.

Citation

Wen, S., & Zhao, J. (2010). Corporate governance and the financial crisis: did the theories stand the test?. Butterworths Journal of International Banking and Financial Law, 25(10),

• Journal Article Type: Article
• Publication Date: Jan 1, 2010
• Deposit Date: May 6, 2011
• Publicly Available Date: Apr 5, 2016
• Journal: Butterworths Journal of International Banking & Financial Law
• Print ISSN: 0269-2694
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 25
• Issue: 10