Usually, reflections on corporate governance take an inside perspective, i.e., a shareholder's or a director's point of view. Two perspectives are underrepresented in the discussion: firstly, an analysis from a regulatory perspective, i.e., from the government's point of view; secondly, an analysis that draws on the recent literature on behavioral economics, experimental economics, and psychology. This paper tries to compensate for this gap in the literature.

The claim of this paper is that there is some potential for regulatory intervention to change corporate conduct by modifying the institutional design. However, this potential is limited. The paper addresses the task of institutional design by applying behavioral analysis and provides an analysis of concrete, real-world legal corporate governance institutions. It explores potentials for changing corporate conduct by accordingly shaping institutions on the basis of the foregoing behavioral analysis