Regulatory vs.Governance Strategies Regulatory:directly constrain the actions of corporate actors. E.g.a standard of behavior such as a director's duty of loyalty and care. Governance:channel the distribution of power and payoffs within companies to reduce opportunism. E.g.the law may accord direct decision rights to a vulnerable corporate constituency,as when it requires shareholder approval of mergers.Regulatory vs. Governance Strategies Regulatory: directly constrain the actions of corporate actors. E.g. a standard of behavior such as a director’s duty of loyalty and care. Governance: channel the distribution of power and payoffs within companies to reduce opportunism. E.g. the law may accord direct decision rights to a vulnerable corporate constituency, as when it requires shareholder approval of mergers