Tronc is a publishing firm that owns several newspapers, including the Los Angeles Times and the Chicago Tribune. In early 2017, one of Tronc’s largest investors sent the corporation a letter stating that he was “troubled by the company’s corporate governance, or lack thereof.” In particular, he was unhappy with a limit of 25 percent on how many of the corporation’s shares he could own and with an attempt to remove him from the board of directors.

a. What is corporate governance? In whose interest should corporations be governed? Briefly explain.

b. Is limiting the percentage of a firm’s stock that one person can hold an example of good corporate governance or bad corporate governance? Briefly explain.