Seattle University Law Review
In the "managerialist" world that preceded our present world--the shareholder value world--some corporate managers could, and did, help themselves when they should have been doing their jobs. They were bad agents, using their positions to get unwarranted leisure and unwarranted perquisites at the expense of their principals, whether the principals were seen as the corporation, its shareholders, or both. The modern agency cost paradigm has focused the attention of courts, directors, and scholars on this problem, in part by conceptualizing the duty of corporate managers as maximizing shareholder value. 1 This paradigm has had a variety of effects: some good, some bad, and some ugly.
Claire Hill and Brett McDonnell, The Agency Cost Paradigm: The Good, the Bad, and the Ugly, 38 Seattle U. L. Rev. 561 (2015), available at http://scholarship.law.umn.edu/faculty_articles/82.