1. The majority of major corporations are franchised as public corporations. Discuss the key strength and weakness of the public corporation. When do you think the public corporation as an organizational form is unsuitable?

2. The public corporation is owned by a multitude of shareholders but run by professional managers. Managers can take self-interested actions at the expense of shareholders. Discuss the conditions under which the so-called agency problem arises.

3. Following corporate scandals and failures in the United States and abroad, there has been a growing demand for corporate governance reform. What should be the key objectives of corporate governance reform? What kinds of obstacles can thwart reform efforts?

4. Studies show that the legal protection of shareholder rights varies a great deal across countries. Discuss the possible reasons why the English common law tradition provides the strongest protection of investors and the French civil law tradition the weakest.

5. Explain the wedge between control and cash flow rights and discuss its implications for corporate governance.