Theoretical and Conceptual Framework
The theory of principal-agent relationships as a core framework of information economics is generally considered the starting point for the discussion on Corporate Governance. It builds on the property rights theory, since it deals with the delegation of control rights from the principal to the agent. The principal-agent relationship can be defined as “[...] a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf, which involves delegating some decision-making authority to the agent.”3
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