In brief, the director primacy model views the corporation as a vehicle by which the board of directors hires various factors of production. The board of directors thus is not a mere agent of the shareholders, but rather is a sui generis body - a sort of Platonic guardian - serving as the nexus of the various contracts making up the corporation. Director primacy thus claims that fiat - centralized decisionmaking - is the essential attribute of efficient corporate governance.
He goes on to discuss how the recent dethroning of AIG CEO Maurice Greenberg and elevation of Robert Iger to the top spot at Disney demonstrates how boards are increasinglyasserting their power.
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Of course, since the board acts as the agents of shareholders, there still exists a potential agency problem there. I'll be posting more on that in future posts.