During this period, research concentrated on the agency problem embedded in the separation of ownership and control. The dominant paradigm treated governance as an instrument to align managers' incentives with owners through monitoring, bonding, and incentive contracts, especially in settings of dispersed ownership. Methodologically, both formal modeling and empirical testing linked governance devices to risk-sharing, ownership structure, and corporate control mechanisms, highlighting the centrality of contract design and legal-rights frameworks in shaping corporate outcomes.