Corporate Governance and Governance

Three main governance perspectives exist. It is difficult to integrate them, since they consider the nature and functions of the firm in dissimilar ways and originate different governance choices. The first of these is the standard shareholder value analysis, which concentrates on the consequences of the separation between ownership and control and of contract incompleteness. With dispersed ownership, the crucial problem of corporate governance is to give shareholders proper incentives to supply firms with capital. The solution is to allocate control rights to shareholders, make information standardized, transparent and free and rely on the market for corporate control. The second is