Berle Means Thesis

To address these issues, we start by considering the questions raised in the early twentieth century about the nature of the corporation and the status of managers; and how, in response to these questions, Berle constructed a certain conceptualization of the corporation and of managerial capitalism; we shall then revisit the contract-based approach of Jensen and Meckling, to assess the theoretical and ideological content and show how it was actually strongly opposed to Berle’s vision.Lastly, by way of conclusion, we shall endeavor to show how the opposition between these two theorizations should be seen, above all, as an opposition between two theories that are both “performative” rather than positive, and that the apparent success of agency theory and the dominance of shareholder primacy in corporate governance can only be understood in an institutional and political perspective.By continuing to use this site, you consent to the use of cookies.We use cookies to offer you a better experience, personalize content, tailor advertising, provide social media features, and better understand the use of our services.We will show that agency theory can be considered a response to the most important ideas advanced by Berle and Means, and then by Berle (and others), after the New Deal and the Second World War.

For further information, including about cookie settings, please read our Cookie Policy .Therefore we would like to draw your attention to our House Rules.Disclaimer: This work has been submitted by a student.Abstract This paper assesses the effects of Berle and Means' study of the separation of corporate ownership from control on corporate financial reporting theory, research and policy.Their focus on shareholders and managers provided a starting point for the subsequent development of agency theory such that this relationship has come to dominate capital markets research and policy, to the virtual exclusion of parallel issues involving other parties. Prices in € represent the retail prices valid in Germany (unless otherwise indicated). Prices do not include postage and handling if applicable. Over the last thirty years, the shareholder conception of corporate governance has established itself as the foundation of the power structure and management principles of the corporation.It is based on a specific theorization of the firm: agency theory.Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of Law Teacher.Background of shareholder primacy theory The main arguments for and against of shareholder primacy theory Conclusion Shareholder primacy theory is a dominant principle in corporate law that leads the corporation decision-makers focus on the shareholders’ interests.Although there were some fluctuations between shareholder primacy and stakeholder theories from the time of Berle-Dodd debate until 1970s, shareholder primacy has become thriftily since the late 1970s, Besides, from a business practice point view, shareholder primacy is an accurate description model as it clarifies that directors only have economic goals and responsibilities to shareholders.That is to say, directors are empowered to do anything which can increase shareholders’ benefit that is recoginsed as lawful activities.

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  1. Further reinforcements came from such 19th-century intellectual figures as the comte de Gobineau (1816–82), Richard Wagner (1813–83), and Houston Stewart Chamberlain (1855–1927), all of whom greatly influenced early National Socialism with their claims of the racial and cultural superiority of the “Nordic” (Germanic) peoples over all other Europeans and all other races.