Angel Agents: Agency Theory Reconsidered

Agency theory stipulates that executives will use their superior information to exploit owners unless effectively monitored or incentivized to do otherwise: Agents here are held to be opportunists and owners responsible parties. However, sometimes agency theory misses the mark and the reverse holds true. It may be the owners who exploit their firm and compromise its long-term interests, and steward-like agents who use their superior information to benefit a firm and its stakeholders. This analysis provides an inspiring historical example of how that can happen and illustrates some conditions under which one might expect similarly happy circumstances to arise.