The Theoretical Foundation of Modern Corporate Governance

As the modern enterprise system develops,a famous proposition of Separation of Ownership and Control was promoted.By dissecting the property right of modern enterprise,new institutional economists suggest to make ex ante institutional arrangement of governance structure by allocating residual rights of control.The development of agency theory and stakeholder theory based on the information economics provide a better understanding on the essence of corporate governance.This paper provides a brief review of the theoretical origin and foundation of modern corporate governance from the viewpoint of modern enterprise theory,property right theory,agency theory and stakeholder theory.