The Role of Shareholders in the Modern American Corporation
D. Gordon Smith, 𝘛𝘩𝘦 𝘙𝘰𝘭𝘦 𝘰𝘧 𝘚𝘩𝘢𝘳𝘦𝘩𝘰𝘭𝘥𝘦𝘳𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘔𝘰𝘥𝘦𝘳𝘯 𝘈𝘮𝘦𝘳𝘪𝘤𝘢𝘯 𝘊𝘰𝘳𝘱𝘰𝘳𝘢𝘵𝘪𝘰𝘯, 𝘪𝘯 Rᴇsᴇᴀʀᴄʜ Hᴀɴᴅʙᴏᴏᴋ ᴏɴ ᴛʜᴇ Eᴄᴏɴᴏᴍɪᴄs ᴏғ Cᴏʀᴘᴏʀᴀᴛᴇ Lᴀᴡ 52 (Claire A. Hill & Brett H. McDonnell eds., 2012).
This chapter from the forthcoming Research Handbook on the Economics of Corporate Law (Claire Hill & Brett McDonnell, eds.) examines the role of shareholders in the modern American public corporation. The chapter starts with the Berle and Means (1932) problem of the separation of ownership and control, but notes that the rise of institutional investors has changed the situation. Shareholders have three main sets of rights through which they can protect themselves: the right to vote, to sell, and to sue. Each of these rights has evolved significantly in recent years. The chapter describes some of the changes and debates, and also briefly addresses the question of the proper beneficiaries of corporate decisions.
Chapter 4 in Research Handbook on the Economics of Corporate Law, 2012 from Edward Elgar Publishing.
RESEARCH HANDBOOK ON THE ECONOMICS OF CORPORATE LAW