RELATED PARTY TRANSACTIONS AND CORPORATE GOVERNANCE

Elizabeth A. Gordon, Elaine Henry and Darius Palia

A chapter in Corporate Governance, 2004, pp 1-27 from Emerald Group Publishing Limited

Abstract: Transactions between a firm and its own managers, directors, principal owners or affiliates are known as related party transactions. Such transactions, which are diverse and often complex, represent a corporate governance challenge. This paper initiates research in finance on related party transactions, which have implications for agency literature. We first explore two alternative perspectives of related party transactions: the view that such transactions are conflicts of interest which compromise management’s agency responsibility to shareholders as well as directors’ monitoring functions; and the view that such transactions are efficient transactions that fulfill rational economic demands of a firm such as the need for service providers with in-depth firm-specific knowledge. We describe related party transactions for a sample of 112 publicly-traded companies, including the types of transactions and parties involved. This paper provides a starting point in related party transactions research.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.101 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.101 ... d&utm_campaign=repec (application/pdf)
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:eme:afeczz:s1569-3732(04)09001-2

DOI: 10.1016/S1569-3732(04)09001-2

Access Statistics for this chapter

More chapters in Advances in Financial Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().