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

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,