Mainstream corporate governance has been geared towards issues with public companies and dispersed shareholders. The problem has always been the agency issue. The question has been: how can managers be reined in, in the interest of shareholders overall? There is nothing wrong with that focus. Dealing with the agency issue in public companies was a very important development, and we have made progress worldwide in focusing on this. The only problem is that perhaps this was too limited a view. There is more to corporate governance than this.

The subject of this chapter is entrepreneurship; Entrepreneurship and corporate governance. Entrepreneurs do things that have not been tried before. Their function in society is precisely to meet new challenges by embarking in uncertainty – a course of action whose odds cannot be calculated with any precision. The challenge for us, practitioners and academics, is to identify how corporate governance can support entrepreneurship. This is challenging as well because we do not know how to support something that is uncertain. Entrepreneurship is based on knowledge that is not possible to describe, let alone communicate.

This chapter analyses the harmonisation of national company laws and corporate governance rules in the EU countries. The harmonisation of national rules has both advantages and disadvantages, however ignoring differences in company ownership structures among countries runs the risk of diluting control and hindering an active ownership function within a firm. To address the risks related to harmonisation in the EU three issues are examined; 1) the varying characteristics of shares, such as voting rights, 2) controlling owners role in composition, competence and working methods of the board, and 3) market for corporate control.

This chapter aims at discussing the importance of how to organise corporate governance in the current economic context where there is a pressing need to restore trust in the integrity of public companies and their corporate governance arrangements. The chapter develops three assumptions on long-term and short-term shareholdership and seeks to test them from a corporate governance perspective. To conclude, the chapter highlights the benefits of flexibility of corporate governance codes, how companies comply with the codes and the importance of explanations in a comply-or-explain method.