The foundations of governance theory: A case for the resource-dependence perspective

Abstract

In this paper I distinguish between the justificatory and explanatory roles of theory, and propose that the justificatory role played in the literature thus far by agency theory is subject to limitations. I therefore argue for the use of resource-dependence theory as the epistemological basis of the corporate governance domain knowledge system, and present an alternate model of corporate governance. Potential contributions of this alternate model are discussed.