The defining challenge of the economic approach to corporate governance consists of integrating the question of performance in the analysis of legitimate governance forms. This is a challenge that goes to the heart of corporate governance, because economic performance and the legitimacy of the corporation are inextricably linked. Since the business corporation is a productive organization, it follows that corporate governance becomes established and grows stronger in line with its capacity to ensure the economic prosperity of the organization.

This line of questioning emerges and develops at precise moments of crisis in the history of the corporation: initially in the work of Berle and Means, as the separation between ownership and control materializing at the time signified the end of the genetic legitimacy of the founder entrepreneur. Berle and Means, and with them the institutionalists who dominated the technocratic period, argued that state intervention was necessary to ensure the performance of the corporation no longer controlled by its owners. In the 1970s, the time of a second crisis in corporate governance, a different line of thinking emerged to challenge the institutionalists and propose a return to the basic principles of the liberal political project. In a society of fragmented property ownership, it was suggested, the financial markets were the appropriate locus of entrepreneurial power. The evolution of corporate governance over the last quarter of the twentieth century has gone in this direction, a development that has contributed to the impression that corporate governance was now based on economic science.