Michael Jensen

Michael Jensen is a prominent American economist best known for his work on agency theory, which examines the relationship between principals (like shareholders) and agents (like company executives) in business. His research highlights how differing interests can lead to conflicts and inefficiencies in organizations. Jensen also co-authored the influential article "Theory of the Firm," which explores why firms exist and how they operate. His ideas have greatly influenced modern corporate governance and financial management, emphasizing the importance of aligning incentives to ensure that managers act in the best interests of shareholders.