Integrity, unprincipled agents and corporate governance reform

Daniel Arce

European Journal of Law and Economics, 2015, vol. 39, issue 3, 539-551

Abstract: This study investigates the implications of integrity—interpreted as the alignment of one’s words and deeds—within the agency paradigm by explicitly allowing for unprincipled behavior (agent misconduct) in addition to conflicts of interest resulting from the separation of ownership and control. Under adverse selection, contracts that screen for agents who exhibit integrity characterize a previously unidentified symbiosis between the penalty for unprincipled behavior and high-powered incentive pay. The resulting contracts and penalties are interpreted in light of the Sarbanes–Oxley and Dodd–Frank Acts. Copyright Springer Science+Business Media New York 2015

Keywords: Unprincipled agents; Integrity; Punishment; Incentive pay; Adverse selection; Sarbanes–Oxley; Dodd–Frank; K22; L21; M14; M52 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1007/s10657-014-9478-4 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ejlwec:v:39:y:2015:i:3:p:539-551

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10657

DOI: 10.1007/s10657-014-9478-4

Access Statistics for this article

European Journal of Law and Economics is currently edited by Jürgen Georg Backhaus, Giovanni B. Ramello and Alain Marciano

More articles in European Journal of Law and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().