ABSTRACT
This chapter discusses a comprehensive analysis at both the economy-wide and firm-specific level in order to explore what is meant by 'governance', and draws insights from recent and past failures of governance. It serves as the background to the analysis of the evolution of business groups in Mexico, providing an empirical basis for understanding the economic and political changes in Mexico that have taken place since the beginning of the 1980s. The chapter reviews the current economic situation and changes in terms of economic growth. It explores the various dimensions of Mexico's restructuring process during four major phases in the last three decades. The chapter also explores the main features of large Mexican firms, recent developments in the legislative and corporate governance environment and their impact on large business groups. It examines the issue of the composition of the Board of Directors as well as the question of interconnections between inter-organizational networks, interlocked boards and close ties between their members.
