Agency theory provides a model of the relationship between principals and agents whose assumptions have been extended to include bounded rationality and bounded self-interest, and to model the agency relationship as one in which a single agent serves multiple principals. Models of agency with multiple principals focus on the conflicting objectives of principals rather than of the principal and agent. Yet we do not understand sufficiently well how, in models of agency with multiple principals, agents both facilitate participation of multiple principals in the organization and allocate value between these principals. I address these questions by synthesizing White’s account of agency with Power’s account of the audit trail as micro-foundation, to outline a relational account of agency. This relational account extends agency theory by suggesting that agents mediate between two principals with conflicting objectives by allocating value between these principals when accounting standards are permissive. This mediation ceases when standards are rigorous. I outline two mechanisms through which relational agency operates. The first defines the principal as holder of rights of residual control. The second explains the manager as allocating residual income between multiple residual claimants.