Shareholder Primacy and Managerial Accountability

39 Pages Posted: 6 Feb 2007

See all articles by Antoine Reberioux

Antoine Reberioux

Université Paris VII Denis Diderot; University Antilles Guyane - Faculty of Law and Economics

Date Written: January 2007


Shareholder primacy is increasingly considered as the most effective way to foster managerial (corporate) accountability. Contrary to this now standard argument, we consider that shareholder primacy, rather than gatekeeper failure, is directly responsible for the multiplication of accounting irregularities and the dramatic increase in executive compensations. To defend this thesis, we propose a new reading of Berle and Means (1932), Galbraith (1973) and Alchian and Demsetz (1972), stressing the logical failure of a control of the business firm provided for by stock markets: the implementation of shareholder primacy implies a partial disconnection between access to internal knowledge and empowerment. In turn, this disconnection favours deceptive behaviours on the part of corporate insiders. Empirical evidence mostly based on Enron-era financial scandals illustrates our argument.

Keywords: shareholder primacy, managerial accountability, theory of the firm

JEL Classification: D23, G30, L20

Suggested Citation

Reberioux, Antoine, Shareholder Primacy and Managerial Accountability (January 2007). CLPE Research Paper No. 1/2007. Available at SSRN: or

Antoine Reberioux (Contact Author)

Université Paris VII Denis Diderot

2, place Jussieu
Paris, 75005

University Antilles Guyane - Faculty of Law and Economics ( email )

Pointe à Pitre

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics