ABSTRACT
Two texts from the inter-war period have an enduring influence: J.M. Keynes’ General Theory (1936) and A. Berle and G. Means’ Modern Corporation and Private Property (1932). The persisting influence of such texts can be found in the diversity of issues being addressed. While some issues still resonate, other aspects have long since been ignored. In the case of Berle and Means, the fundamental issues that still attract attention in corporation law, corporate finance and related subjects are shareholder primacy and the separation of ownership and control. In modern corporate law, The Modern Corporation and Private Property is taken to represent ‘shareholder primacy’, that corporate managers have an overriding responsibility to maximize shareholder value. Shareholder primacy is contrasted with two other viewpoints: those that allow for managerial discretion and those that advocate corporate social responsibility. Millon (1990) detailed the debate between these different positions dealing with “the fundamental nature of corporate activity and the appropriate goals of corporate law” (Bratton and Wachter 2008, p.100).
