Although the term “corporate governance” is relatively new in the economist’s lexicon, the issues with which it is concerned are as old as the profession itself. In this article, first I try to illustrate this, and then I trace the development of the literature, including discussions of the so-called managerial discretion literature and the principal–agent literature. Following a discussion of asset bubbles, I illustrate the tension between concerns about corporate governance and neoclassical economics by examining the literature on managerial compensation and mergers. This literature reveals a wide gap between traditional neoclassical economics and more recent developments in behavioral economics.