Law Commons^™

Turning Servile Opportunities To Gold: A Strategic Analysis Of The Corporate Opportunities Doctrine, Eric L. Talley

Faculty Scholarship

Perhaps no single motif permeates corporate law and governance literature like the problem of agency costs. Though modest in concept, the canonical principal-agent framework yields fundamental insights into virtually every economic relationship involving the firm. These insights, in turn, not only animate prevailing positive accounts of the modern corporation, but they also provide a normative basis for regulating the oft-lamented gulf between ownership and control.

Despite their pervasiveness, problems of agency costs are rarely more vexing than when an agent is also a potential competitor. A notable example of such a scenario occurs when a corporate manager acquires information about …