Abstract
The purpose of this article is to provide a more comprehensive principal–agent theory of nonprofit organizations by combining agency theory with aspects of stakeholder theory, stewardship theory, and empirical literature on the governance and management of nonprofit organizations. First, the use of a stakeholder perspective allows us to identify the principals of a nonprofit organization and to divide nonprofit principal–agent relationships into different categories. Next, we discuss the assumptions and prescriptions of agency theory and stewardship theory and suggest that a complementary use of these theories can contribute to the research of principal–agent relationships. By discussing empirical literature from a stewardship–agency perspective, we are able to address issues of nonprofit accountability. We conclude by giving suggestions for further research and by stressing the importance of a recruitment policy to avoid internal agency problems.
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