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Selected Works

2015

Business Organizations Law

Lynn A. Stout

Adolph A. Berle

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Full-Text Articles in Law

Bad And Not-So-Bad Arguments For Shareholder Primacy, Lynn A. Stout Feb 2015

Bad And Not-So-Bad Arguments For Shareholder Primacy, Lynn A. Stout

Lynn A. Stout

In 1932, the Harvard Law Review published a debate between two preeminent corporate scholars on the subject of the proper purpose of the public corporation. On one side stood the renowned Adolph A. Berle, coauthor of the classic The Modern Corporation and Private Property. Berle argued for what is now called "shareholder primacy"—the view that the corporation exists only to make money for its shareholders. According to Berle, "all powers granted to a corporation or to the management of a corporation, or to any group within the corporation. . . [are] at all times exercisable only for the ratable …