This paper argues for greater focus on an agency theory (AT) perspective in understanding corporate governance in multinational enterprises (MNEs) since, despite recent developments, the traditional internalisation theory approach limits our understanding of the behaviour of these firms. We analyse the contribution of an AT perspective to understanding various aspects of corporate governance in multinational enterprises: internationalisation, international joint ventures, headquarters-subsidiaries relationships, business groups and new forms of business groups. We suggest that while the emerging AT literature has tended to focus on the role of ownership, there is a need for further research on other key corporate governance mechanisms such as the role and composition of boards of directors, separation of CEOs and board chairs, executive remuneration, financial reporting and the role of the market for corporate control. There is also scope to examine further the implications of different institutional environments for AT perspectives on the behaviour of multinational enterprises.