Berle-Dodd Debate

The Berle-Dodd Debate of the 1930s centered on how corporate managers and shareholders interact. Berle argued that as companies grew, owners (shareholders) lost direct control, leaving managers to run the business, which could lead to managers acting in their own interests. Dodd believed that corporate managers could also serve broader social goals and responsibilities beyond just maximizing shareholder profits. The debate highlights tensions between corporate governance focused on shareholders versus a broader sense of social responsibility, influencing how businesses are regulated and managed today.