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Full-Text Articles in Law
Bad And Not-So-Bad Arguments For Shareholder Primacy, Lynn A. Stout
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 …
Director Accountability And The Mediating Role Of The Corporate Board, Margaret M. Blair, Lynn A. Stout
Director Accountability And The Mediating Role Of The Corporate Board, Margaret M. Blair, Lynn A. Stout
Lynn A. Stout
One of the most pressing questions facing both corporate scholars and businesspeople today is how corporate directors can be made accountable. Before addressing this issue, however, it seems important to consider two antecedent questions: To whom should directors be accountable? And for what? Contemporary corporate scholarship often starts from a "shareholder primacy" perspective that holds that directors of public corporations ought to be accountable only to the shareholders, and ought to be accountable only for maximizing the value of the shareholders' shares. This perspective rests on the conventional contractarian assumption that the shareholders are the sole residual claimants and risk …
The Shareholder Value Myth, Lynn Stout