Robert Illig opines (in 61 J. Legal Educ. 585, 617-18):
Much of the scholarly debate over the regulation of large businesses falls under the rubric of “corporate governance.” Beginning with Adolf Berle and Gardiner Means's classic 1933 account of The Modern Corporation and Private Property, this field has focused primarily on agency costs. These are the inefficiencies that result when a principal--in this case, a shareholder, partner or other equity investor--engages an agent or manager to do his or her bidding. Because the interests of the agent inevitably differ from those of the principal, losses arise from the agent's predictably divergent behavior. The goal of corporate governance reform is to minimize those losses.
Conservative law professor Stephen Bainbridge describes the origins and development of this field in The New Corporate Governance in Theory and Practice. Bainbridge, though a partisan law and economics scholar, is an unusually clear and well-organized writer. As a result, so long as you are able to judge the ideological overlay within the confines of your own prejudices, you will find this volume to be a thorough and understandable introduction to the field.
