Multiple Agency Theory in CorporatE Governance: an Alternative Lens to Study Independent Directors

Research Question/Issue: This paper replies to the call for more in-depth studies into multiple agency theory. The purpose is twofold: (1) To analyse the fundaments of multiple agency theory based on five key features stemming from existing literature; (1) to reconcile four corporate theories in order to better understand the five key fundaments of multiple agency theory (2) To illustrate how this more comprehensive multi theoretical approach is able to develop a better understanding of the role and functioning of independent directors. Research Findings/Insights: This study develops an alternative theoretical framework, namely multiple agency theory, from the reconciliation of agency theory with four theories namely, stakeholder theory, resource dependency theory, stewardship theory and identity theory. Multiple agency theory is based on a pluralistic and holistic view of the board as a group of individuals, and moves away from the traditional single agency approach. Theoretical/Academic Implications: This study takes the opportunity to seek to open up the ‘black box’ of dynamics and relationships among directors, and the phenomenon of independent directors is examined through a multiple agency theory lens leading to new propositions for future research. Practitioner/Policy Implications: This study offers refreshing insights for professionals, including directors and top managers about how independent directors function within a board as well as within the organisation.