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Abstract:
This article explores the long-standing suspicion of the individual shareholder and the corresponding ambivalence about shareholder democracy as it is seen in conversations about the shareholder's role in the modern public corporation throughout the twentieth century.

The article examines two competing conceptions of the shareholder's role in the corporation: one focuses on the role of shareholders as investors, the other emphasizes the role of shareholders as potential participants in corporate management. I argue that scholars and reformers who have conceived of shareholders as investors limited the locus of shareholder democracy to the market. The writings of Louis Brandeis, Henry Manne, and Chancellor Allen offer examples of this vision. At the same time, scholars and reformers who argued that shareholders should have a more active role in corporate management (including William Ripley, Adolf Berle, William Douglas, and the early New Dealers) were reluctant to give shareholders meaningful access to the corporate decision-making processes. They feared not only that shareholders were too passive to participate in corporate management, but also that they could not be trusted to make the correct decisions. For the most part, these scholars ended up using the rhetoric of shareholder democracy (and the shareholders) as a proxy to achieving other goals. In the course of the twentieth century, these scholars' goals shifted from taming the power of the control group to constraining management to legitimating managerial power. More important, because they refused truly to empower shareholders, these scholars' attempts presumably to promote shareholder democracy ultimately emptied the idea of shareholder democracy of content. Gradually, the rhetoric of democracy became an apology for the status quo.

corporations, shareholder activism, shareholder proposals, proxy contest, control, voting rights, institutional investors, investors, Blasius, securities regulation, shareholder democracy, corporate democracy, William Ripley, William Douglas, Louis Brandeis, Henry Manne, William Allen, Adolf Berle

Abstract:
This article is an intellectual history of Adolf A. Berle, Jr. and Gardiner C. Means, The Modern Corporation and Private Property (1932). I argue that Berle and Means's concern was not the separation of ownership from control in large pubic corporations, as many scholars have suggested, but rather the allocation of power between the state and a wide range of institutions. As I demonstrate, Berle and Means shared a legal pluralist vision of the modern state. Legal pluralism treated organizations as centers of power that had to be accommodated within the political and legal structure. Berle and Means viewed collective entities such as corporations as the foundation of the modern state, at the same time that their concern about the power that these entities could exercise led them to proclaim that corporate power (like sovereign power) should be exercised to benefit the community at large.

The article further explores how Berle and Means's legal pluralist vision was eclipsed in the second half of the twentieth century as the attention of lawyers, legal scholars, and government officials shifted from collective entities to the individual as the basis for legal and political analysis (postwar interest group pluralism reflected this shift). The article then shows how this transformation helped legitimate the view that corporate entities were nexuses of private, contractual relationships. Informed by neoclassical economics, advocates of this new vision of the firm emphasized the role of economic markets in regulating corporate power. With deregulation and free markets in mind, neoclassicists came to treat The Modern Corporation and Private Property as a book about the limited question of the effects of the separation of ownership from control on efficiency and profit maximization, not as a book about corporate power as Berle and Means had intended.

corporations, corporate governance, legal history, Adolf Berle, Gardiner Means, nexus of contracts, legal pluralism, sovereignty, corporate power, corporate social responsibility, neoclassical economics, law and economics, interest group pluralism, pluralism

Abstract:
This article examines how, in the course of the twentieth century, legal scholars and political theorists helped remove the interests of workers (as differentiated from shareholders, officers, and directors) from the core concerns of corporate law and theory. Specifically, the article demonstrates how scholars' conversations about corporate entities and corporate power were influenced by a shared cultural and intellectual objection to Marxist class analysis with its focus on the proletariat. It further explores how the purging of the working class from the scholarly imagination paved a way, first, for the rise of the new classes of managers and owners and the shareholder-centered vision of corporate law and, then, for the emergence of a narrow, shareholder-wealth-maximization norm.

The article uses class as a category of analysis to interpret major events in the history of corporate law: the debate about the personality of associations in the 1910s and 1920s, the publication of The Modern Corporation and Private Property, the debate between Adolf A. Berle, Jr. and E. Merrick Dodd, Jr. about the nature and scope of managerial duties, the rise of managerialism, and the ascent of the economic theory of the firm in the 1980s.

Shareholder Valuism, Adolf A. Berle, Jr., Gardiner Means, E. Merrick Dodd, Managerialism, Managers, Corporations, Corporate Governance, Corporate Power, Class, Pluralism, Legal Pluralism, Industrial Pluralism, Workers, Corporate Social Responsibility, shareholders, stockholders

Abstract:
This chapter is a preliminary exploration of the interdependence of finance and the rules of corporate governance. The authors argue that the surviving rules and norms of corporate governance, among many that jurists articulated throughout the twentieth century, were primarily those that reflected the financial realities of their times. Finance drove the reconceptualization of New Jersey corporate law at the turn of the twentieth century, which in turn facilitated the great merger wave that catalyzed the intertwined movements for federal incorporation and antitrust reform. Finance made the 1920s’ and 1930s’ attempts to restrain corporate power ineffective. Finance shaped our understanding of the form and function of the board of directors during the mid-century age of managerialism; and finance led to the broad acceptance of the monitoring board and the norm of shareholder valuism in the last decades of the twentieth century. The current financial crisis illustrates some of the consequences of law’s deference to finance.

finance, corporate law, stock, stock markets, shareholders, shareholder proposals, corporate history, shareholder valuism, managerialism