November 6, 2013| 0

The Agency Problem (John 7:16-18)

16 So Jesus answered them, “My teaching is not mine, but his who sent me. 17 If anyone’s will is to do God’s will, he will know whether the teaching is from God or whether I am speaking on my own authority. 18 The one who speaks on his own authority seeks his own glory; but the one who seeks the glory of him who sent him is true, and in him there is no falsehood.

The agency problem is a fundamental issue in business ethics, especially in the financial industry. The problem is that the financial manager has mixed motives. The manager’s task is to earn the greatest possible return on investment for the client; yet at the same time, the manager wants to earn as much profit as possible for oneself. The manager is the investor’s agent, sent on a mission to carry out the will of the principal.  The dilemma arises invariably when the manager’s personal gains do not necessarily align perfectly well with maximization of the client’s return on investment. That’s called “the agency problem.”

Jesus is the pure embodiment of the Father’s will. He is the one perfectly true person on earth. He seeks not his own glory, but the glory of God, the one who sent him. When he challenges his accusers by saying, “the one who seeks the glory of him who sent him is true, and in him there is no falsehood,” he is simultaneously accusing his accusers of seeking their own glory, while bearing witness to the glory of God.

Here is a fundamental lesson for integrity. We can always test our actions by asking whether we are seeking to glorify ourselves, or to glorify the one who sent us. When we use the privilege of our position to seek selfish gain at the expense of another, or become defensive to protect our pride, we have fallen on the wrong side of the agency dilemma. The challenge in business dealings is the same as the challenge of walking in faithfulness—to stay true to the one who sent us. That is a pretty good definition of integrity.


© Bruce D. Baker, 2013


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