The reform of corporate governance is again on the agenda in the wake of Enron and excessive risk-taking by financial institutions. However, the search for new and better forms of governance often seems to lack guiding principles. A theory of corporate governance ought to emerge from a theory of the firm. Yet the literature shows how this project is both difficult and far from complete. In this paper, we review how existing theory provides a variety of arguments favouring either a shareholder or a stakeholder orientation. These arguments may depend on whether the prime objective for governance is improved current performance or a more long term focus for firms. A brief review of recent US governance reforms is given as a back-drop to discussing more far-reaching proposals that have emerged in the recent literature; a greater role for institutional investors on the one hand or a return to managerial capitalism on the other.