Theoretical Perspectives of Corporate Governance

Abstract

Corporate Governance is relatively new area and its development has been affected by different theories from different domain, including law, economics, finance and management. This article gives a theoretical overview within the disciplines of corporate governance. This research paper provides an overview of main theory i.e., agency theory as well as other theories like stewardship theory, stakeholder theory, resource dependency theory and transaction cost economics theory that influences the development of corporate governance. Researchers also reveal the differences among these theories, spanning over different disciplines with diverge scope. Some theories are most appropriate are relevant for some context as compared to the others. The study calls the need for the development of a general theory of corporate governance with conjunction of legal system (common law or civil law) and considering other actors. It gives new mode of thinking and new direction of research in analysing corporate governance.