'Resource linkages' will be the key.

• Author: Dalton, Dan R.
• Position: The Shape of Things to Come - Brief Article

AGENCY THEORY is the most influential development relevant to the history of the board of directors. Adam Smith, in An Inquiry into the Nature and Causes of the Wealth of Nations (1776), captured its essence with his observation that managers may not be as careful in their stewardship of shareholders' investments as they would with their own. In 1932, Adolph Berle and Gardiner Means added that professional managers, not owners, exercised the day-to-day management of the corporation, necessitating a board of directors to protect shareholders' interests.

The history of governance is dominated by attention to directors' independence from corporate management, especially the CEO. Boards have approved programs and policies designed to align managers' and shareholders' interests, notably equity based compensation programs.

The future of governance is resources. What will distinguish the 21st century board is its access to information, people, networks, and services that are otherwise unavailable to the firm. This "future" is driven by the recognition that research grounded in agency theory provides no evidence that more independent boards or higher...