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Institutional Diversity, Agency and Governance for Sustainable Value

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  • Pitelis, Christos

Abstract

Extant views of (shareholder) value, (corporate) governance, and competitiveness have a narrow view of 'agency', a poorly developed theory of value and pay little attention to sustainability. In this paper we develop a perspective on the determinants of value-wealth creation at the firm, meso-, and national levels, explore the limitations of extant theory of the firm, concerning governance and value in its context, and discuss some prerequisites of sustainability. We conclude that the pursuit of value is not antithetical to, but it derives from, the notion of sustainability, that sustainability requires both internal and external controls and that institutional diversity can help effect mutual 'stewardship' and monitoring. Moreover, for sustainable value creation, corporate governance needs to be aligned to national and global governance.

Suggested Citation

  • Pitelis, Christos, 2009. "Institutional Diversity, Agency and Governance for Sustainable Value," Papers DYNREG39, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:dynreg39
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    References listed on IDEAS

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    3. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    Keywords

    institutions; agency; governance; sustainability; value;
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