Business Secretary Vince Cable has called for a comprehensive rethink about how UK companies are run and how they should be bought and sold.
He told the CBI annual conference that economic growth would come from investment and business.
On the issue of pay, he said executives should "return to Planet Earth".
Meanwhile, the CBI has warned that the UK will need to work hard to maintain its position against rising global competition for business investment.
In his speech, Mr Cable emphasised that "Britain must be open for business", adding that growth would also have to come from overseas trade.
He said that Britain must give businesses confidence to invest, and also work on removing government obstacles to growth and a "slow, oppressive planning regime".
He added that while the government was supporting scientific and technical research, and boosting the number of apprenticeships, "beyond that, the government has very limited scope to promote growth through fiscal stimulus".
The business secretary also asked whether shareholders in one company should be consulted before their board buys another company - a reference to the fact that many Kraft shareholders did not want to buy Cadbury earlier this year.
"On takeovers, I have concerns that too many are driven by short-term financial incentives," he said.
Mr Cable launched a consultation, called "A Long-term Focus for Corporate Britain", as part of a review of corporate governance.
"[The consultation] should produce a rounded account of the issues that may be causing a dislocation between what is best for owners and what is best for managers," he said.
Mr Cable also tackled the issue of directors' remuneration, asking why pay packages have risen so sharply over the past 10 years, and whether greater transparency in pay would be beneficial.
He added that he would continue to keep an eye on the banks.
"No one listening to the Chancellor's statement last week will be under any doubt of the government's collective determination to ensure that banks act in the interests of the wider economy, and that, in the new year, they must not engage in another self-indulgent bonus round," he told the conference.
Following a survey of 121 bosses of the biggest UK firms and large overseas companies operating in Britain, the CBI said the UK needed to cut regulation, and reduce both business and personal taxation.
The survey, which was co-produced by accountancy group Deloitte, said the UK scored highly for its economic stability.
However, respondents said the US, Canada, China and India were now seen as more attractive countries in which to invest.
The CBI said that while the UK still performed favourably, it had "lost ground over the past 10 years".
Richard Lambert, CBI director general, said: "Having acted fast to tackle the deficit, the government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy."
It added that while the UK still performed strongly in areas such as good labour relations and flexible working practices, these issues were now seen as less important for firms making investment decisions.
Regarding sectors of the economy, the CBI said manufacturing companies were the least likely to invest in the UK, while financial firms and others in the service sector were more likely to view the UK in a favourable light.
John Connolly, chief executive and senior partner of Deloitte, said: "If the UK economy is to continue its recovery, then growth and jobs will have to come from the private sector.
"One of the great challenges for policymakers is to provide the right conditions for companies to grow."