ABSTRACT
Corporate governance is concerned with the processes by which corporate entities, particularly limited liability companies, are governed (Tricker 1984: 8). In the early days of capitalism, companies were owned and managed by their owners. As the size of companies grew with the progress of industrialization, owners of companies found it difficult to deal with the heavy demands for capital and the increasing risks incumbent upon running businesses by themselves (Kagawa 1999). What’s more, the possession of wealth may not always meet in one person with the possession of managerial talents. In order to accumulate capital, control risks and utilize professionals, shares of a company were enlarged and dispersed, and company ownership was gradually separated from management. ‘The joint-stock company, with limited liability for its shareholders was an elegantly simple and eminently successful development of the mid-19th century’ (Tricker 1984: 2).
