Agency Theory as a Framework for Higher Education Governance

  • Jussi Kivistö
  • Inga Zalyevska


Agency theory (also known as the principal-agent or principal agency theory/model) describes the relationship between two or more parties, in which one party, designated as the principal, engages another party, designated as the agent, to perform some task on behalf of the principal (Jensen and Meckling, 1976; Moe, 1984; Ross, 1973). The theory assumes that once principals delegate authority to agents, they often have problems controlling them, because agents’ goals often differ from their own and because agents often have better information about their capacity and activities than do principals. The key question of the principal–agent framework is, ‘How does one empower an agent to fulfil the needs of the principal, while at the same time constraining the agent from shirking on their responsibilities?’


High Education Agency Cost Agency Theory Agency Problem Opportunistic Behaviour 


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© Jussi Kivistö and Inga Zalyevska 2015

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  • Jussi Kivistö
  • Inga Zalyevska

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