Effects of agency risks and procedural justice on board processes in venture capital-backed firms

Harry J. Sapienza, M. Audrey Korsgaard, Philip K. Goulet and Jeffrey P. Hoogendam

Entrepreneurship & Regional Development, 2000, vol. 12, issue 4, 331-351

Abstract: This paper builds a model of the effects of agency risk and procedural justice in the boards of directors of venture capital-backed firms. Such boards are unique in that they consist of managers and outside owners with significant power and incentive to be highly involved in venture governance. The authors integrate agency theory and procedural justice perspectives to develop propositions regarding the effects of agency risk and board processes on the responses to poor performance and conflicts of interest. This integrated perspective suggests that factors that increase perceived agency risks will increase outsiders' tendency to focus efforts on monitoring and controlling board decisions and their propensity to resort to formal means to resolve conflicts. However, the authors suggest that through their effects on trust and positive attributions, fair procedures and interactions will reduce these tendencies. A discussion of the practical and theoretical implications of the proposed model concludes the paper.

Date: 2000
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://hdl.handle.net/10.1080/08985620050177949 (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:taf:entreg:v:12:y:2000:i:4:p:331-351

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TEPN20

DOI: 10.1080/08985620050177949

Access Statistics for this article

Entrepreneurship & Regional Development is currently edited by Professor Alistair Anderson

More articles in Entrepreneurship & Regional Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().