The roles played by boards of directors: an integration of the agency and stakeholder theories.

This paper explores the development and articulation of the agency and stakeholder theories ofthe firm and their corresponding logics of shareholder wealth maximisation and stakeholderinterest optimisation. We note how these two perspectives have been viewed as diametricallyopposite normative, instrumental and descriptive theories, despite efforts by some authors tofind common ground. Each has served as a basis for firm governance. We explore the relation-ship of the agency and stakeholder theories to the conceptualisations of the roles of boards ofdirectors, and how both theories hold value in understanding two board function