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Fuzzy Logic And Corporate Governance Theories, Z. Jill Barclift

The University of New Hampshire Law Review

[Excerpt] “Fuzzy logic is a theory that categorizes concepts or things belonging to more than one group. A methodology that explains how things function in multiple groups (not fully in one group or another) offers advantages when no one definition or membership in a group accounts for belonging to multiple groups. The principal/agent model of corporate governance has some characteristics of fuzzy logic theory.

Under traditional agency theory of corporate governance, shareholders, directors, and senior corporate officers each belong to groups having multiple attributes. In the principal/agent model of corporate governance, shareholders are owners or principals; directors are shareholders and …