Governance structures are the institutional elements of labour markets. They provide the rules for the employment relationship. In principle this relationship may be governed by individual regulation by collective bargaining or by legal regulation. Despite the importance of governance structures we still have only a rudimentary understanding of the way in which they emerge and evolve. This book analyses the determinants of governance structures for the employment relationship in Britain. It begins with an evolutionary framework for the analysis of governance structures based on decisions taken about governance structure constitution by the parties to industrial relations. In the long run these structures need to survive institutional competition. A comprehensive discussion of the potential determinants of governance structures is followed by an empirical analysis drawing on historical accounts casestudy evidence and the quantitative data provided by the Workplace IndustrialEmployee Relations Survey series. The individual employers role and perspective provide the main focus of the book. This study provides a comprehensive microfoundation for the analysis of governance structures. In addition it throws light on the discussion of optimal governance structures for the employment relationship and the labour market.