The agency view of corporate governance requires effective monitoring to align the interests of the agent with those of the principal. This paper suggests that conventional proposals to reform corporate governance through legislation, codes of best practice, and the like, are necessary, but underestimate the pressures which reputational intermediaries face from inevitable conflicts of interest and bias. Various strands of the literature on corporate governance, cognitive research and behavioural economics are integrated to shed light on questions regarding the independence of boards of directors and external auditors.
Marnet, O. (2004), "BEHAVIOURAL ASPECTS OF CORPORATE GOVERNANCE", Hirschey, M., and, K.J. and Makhija, A.K. (Ed.) Corporate Governance (Advances in Financial Economics, Vol. 9), Emerald Group Publishing Limited, Bingley, pp. 265-285. https://doi.org/10.1016/S1569-3732(04)09011-5
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