Berle-Means corporation concept

The Berle-Means corporation concept describes a division between ownership and management within large companies. Shareholders own the company but often do not run it directly; instead, professional managers make daily decisions. This separation can lead to agency problems, where managers' interests might diverge from those of shareholders. The concept highlights how corporate governance structures and incentive systems are essential to align managers' actions with shareholders' goals, especially in large, publicly traded companies. It underscores the importance of oversight and accountability in complex corporations where ownership and control are separated.