Testing agency and stewardship theories in the environment of Pakistan (Evidences from oil and gas development and electricity sectors of Pakistan)

Sadia Ahmed, Safdar Hussain Tahir, Ali Raza


The main purpose of the research is to examine empirically that which one theory is best to apply in Pakistani environment. Agency and Stewardship theory is empirically examined for this purpose. Agency theory says that the performance of the company is maximized by the separation of roles of board chair and CEO. Stewardship theory says that the performance of the firm is maximized by duality of the roles of CEO and board chair. Results of an empirical test which is applied on two sectors oil and gas sector and Electricity sector of Pakistan. .the sample is collected from KSE listed companies of both sectors and the data is collected from 2009-2012. The results of descriptive statistics, correlation and regression analysis shows that the CEO duality and BOD has a positive relationship with firm performance but the non-executive directors have a negative impact with firm performance the results fail to provide support to agency theory and provide some support to stewardship theory.

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ISSN : 2251-1547