Divergence of interests and asymmetric information can lead to agency costs

Principals typically have more information than agents

Firms always function more efficiently when agents have complete autonomy

Agents often have better access to financial markets than principals

Employees and competitors

Customers and suppliers

Regulators and auditors

Shareholders and managers

A legal procedure to separate a company from its subsidiaries

A process of diversifying financial assets across industries

A strategy to separate environmental impact from economic growth

A gap between what a company says about its environmental or social commitments and what it actually does

Olivier Williamson

Elinor Ostrom

Olivier Hart

Milton Friedman

Bengt Holmstrom

Bengt Holmstrom

Olivier Williamson

Olivier Hart

Milton Friedman

Elinor Ostrom

Bengt Holmstrom

Olivier Hart

Elinor Ostrom

Olivier Williamson

Milton Friedman

Milton Friedman

Elinor Ostrom

Bengt Holmstrom

Olivier Hart

Olivier Williamson

9

3

1

7

5

It stopped making profits and turned into a volunteer-based entity

It partnered with oil companies to offset its emissions

It transferred ownership to a trust and a nonprofit to ensure profits fund environmental causes

It became a government-owned corporation for sustainability

To lobby for stricter environmental regulations in international trade agreements

To fund political campaigns of environmental activists around the world

To invest 1% of global GDP into renewable energy technologies

To encourage businesses and individuals to donate 1% of their revenues to environmental causes