Berle and Means

The Berle and Means study, conducted in the 1930s, examined the relationship between corporate owners (shareholders) and managers (executives). They found that in large corporations, ownership was dispersed among many shareholders, while managers often held significant power. This separation of ownership and control could lead to managers pursuing their own interests rather than those of shareholders. Their work highlighted potential conflicts of interest in corporate governance and prompted discussions on how to align management actions with shareholders' goals, influencing organizational and economic policies related to corporate oversight.