In his paper Professor Naughton argues that the theory of the firm is flawed when we attempt to explain international corporate behaviour. Not only is the theory of the firm flawed, the agency theory view of corporate governance is also lacking credibility. The central plank on which agency theory is based cannot be shown to lead to superior outcomes. In addition, it is argued that the emphasis on the providers of finance in corporate governance is too narrow a perspective. A stakeholder view of corporate governance, recognising the legitimate role of employees and other stakeholders, is a more appropriate model.