Enhancing Firm Sustainability Through Governance
Show Less

Enhancing Firm Sustainability Through Governance

The Relational Corporate Governance Approach

Francesco de Zwart

This important book presents a fresh perspective on corporate governance and how the relationship between governance mechanisms, processes and variables should be understood through a new unifying theory: the relational corporate governance approach. The approach acts as a tool for analysing the governance health of individual companies and suggests the actions required to remedy sub-optimal governance arrangements. A wide selection of articles, empirical studies and literature have been translated into an original theory which complements existing law and economics models of the firm.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 4: Key Field No 1: The application of the principal theories of the firm to the relational approach

Francesco de Zwart


This chapter examines Key Field No 1 – the Application of the Principal Theories of the Firm to the Relational Approach. More particularly, the chapter first examines the theoretical basis of the relational approach and, in particular, the governance theory or model underpinnings of the ‘weighing mechanism’ introduced in Chapters 1 and 2 comprising: ● the three relational axes of good governance; ● the eight governance factors; and ● the two interrelationship schemes. This chapter will demonstrate that the weighing mechanism or process constitutes the relational approach’s theoretical representation of the nexus. As part of the weighing of insider and outsider interests, the relational approach seeks to complement and add explanatory power to five of the existing principal ‘law and economics’ theories and models of the firm – the nexus of contracts, agency theory, the shareholder primacy model, the stakeholder model and the director primacy model. These principal theories and their interrelationship with the weighing mechanism of the three relational axes of good governance, the eight governance factors (that is, the eight recurring or underpinning aims or purposes which ‘good governance’ seeks to achieve drawn from the four Key Fields) and the two interrelationship schemes will thus be examined here.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.