Thank you for the explanation. I always knew that CG shall serve the interest of share holders but didn’t see it from the perspective of CG is the owners risk mitigation for essentially the information asymmetry problem. Would you say that CGs most profound focus/objective shall be transparency (meaningful information of course) towards owners and stakeholders?
Why would you possibly think that being more efficient in business would lead to less harm for society? One can be extremely efficient in destroying the environment, for example.
Thanks for your comment. Indeed, you are right that companies can be efficient at destroying the environment. It is not my intention to suggest efficiency is equated to doing less harm to society. Companies must be run properly by understanding the impact it has on our society. Companies have a responsibility not just to its shareholders, but to all other stakeholders, directly or indirectly. Companies must be governed with empathy and compassion. Agency theory is not always the right framework to examine the responsibility of companies.
