IDEAS home Printed from https://ideas.repec.org/a/bpj/aelcon/v3y2013i1p43-60n3.html
   My bibliography  Save this article

The Shareholder Model of the Corporation, Between Mythology and Reality

Author

Listed:
  • Weinstein Olivier

    (Faculté de Sciences économiques, University Paris 13, 99 avenue JB Clément, Villetaneuse 93430, France)

Abstract

The corporate governance thought has been dominated since 30 years by the shareholder primacy model. Lynn Stout present us, in his brilliant book, The Shareholder Value Myth, a very clear and conclusive argumentation against this view. In my comments, I consider first some key critics of the shareholder value ideology and its foundations. Next, I address the question of the real nature of shareholders, and shareholders’ interests, essential in the argumentation of Lynn Stout, before coming to critical issues concerning directors and managers. That is, first, the normative question of director’s duties, and secondly the factual question of the nature of the top management in contemporary capitalism.

Suggested Citation

  • Weinstein Olivier, 2013. "The Shareholder Model of the Corporation, Between Mythology and Reality," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(1), pages 43-60, January.
    • Handle: RePEc:bpj:aelcon:v:3:y:2013:i:1:p:43-60:n:3
    DOI: 10.1515/ael-2013-0032
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ael-2013-0032
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ael-2013-0032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Donald Mackenzie & Fabian Muniesa & Lucia Siu, 2007. "Do Economists Make Markets? On the Performativity of Economics," Post-Print halshs-00149145, HAL.
    2. Strasser Kurt A. & Blumberg Phillip, 2011. "Legal Form and Economic Substance of Enterprise Groups: Implications for Legal Policy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-30, January.
    3. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    4. Baldwin, Carliss Y. & Clark, Kim B., 1994. "Capital-Budgeting Systems and Capabilities Investments in U.S. Companies after the Second World War," Business History Review, Cambridge University Press, vol. 68(1), pages 73-109, April.
    5. Weinstein Olivier, 2012. "Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-57, June.
    6. Chandler, Alfred D., 1994. "The Competitive Performance of U.S. Industrial Enterprises since the Second World War," Business History Review, Cambridge University Press, vol. 68(1), pages 1-72, April.
    7. Englander, Ernie & Kaufman, Allen, 2004. "The End of Managerial Ideology: From Corporate Social Responsibility to Corporate Social Indifference," Enterprise & Society, Cambridge University Press, vol. 5(3), pages 404-450, September.
    8. Henry Hansmann & Reinier Kraakman, 2000. "The End Of History For Corporate Law," Yale School of Management Working Papers ysm136, Yale School of Management, revised 01 Feb 2001.
    9. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    10. Olivier Weinstein, 2013. "The Shareholder Model of the Corporation, Between Mythology and Reality," Post-Print hal-01361219, HAL.
    11. Berle Adolph A., 2012. "Accounting and the Law," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(1), pages 1-11, March.
    12. Biondi Yuri, 2011. "The Pure Logic of Accounting: A Critique of the Fair Value Revolution," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-49, January.
    13. Olivier Weinstein, 2012. "Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond," Post-Print hal-01361182, HAL.
    14. Biondi Yuri, 2012. "What Do Shareholders Do? Accounting, Ownership and the Theory of the Firm: Implications for Corporate Governance and Reporting," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-29, June.
    15. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clarke Thomas, 2013. "Deconstructing the Mythology of Shareholder Value: A Comment on Lynn Stout’s “The Shareholder Value Myth”," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(1), pages 15-42, January.
    2. Styhre Alexander, 2018. "The Making of the Shareholder Primacy Governance Model: Price Theory, the Law and Economics School, and Corporate Law Retrenchment Advocacy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 8(3), pages 1-31, December.
    3. Butzbach Olivier & von Mettenheim Kurt E., 2015. "Alternative Banking and Theory," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 5(2), pages 105-171, July.
    4. Clarke, Thomas & Jarvis, Walter & Gholamshahi, Soheyla, 2019. "The impact of corporate governance on compounding inequality: Maximising shareholder value and inflating executive pay," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 63(C).
    5. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, June.
    6. Weinstein Olivier, 2012. "Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-57, June.
    7. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    8. Alice Klettner & Thomas Clarke & Martijn Boersma, 2014. "The Governance of Corporate Sustainability: Empirical Insights into the Development, Leadership and Implementation of Responsible Business Strategy," Journal of Business Ethics, Springer, vol. 122(1), pages 145-165, June.
    9. Guidi, Marco G.D. & Hillier, Joe & Tarbert, Heather, 2010. "Successfully reshaping the ownership relationship by reducing ‘moral debt’ and justly distributing residual claims: The cases from Scott Bader Commonwealth and the John Lewis Partnership," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 21(4), pages 318-328.
    10. Marc Goergen & Christine A. Mallin & Eve Mitleton-Kelly & Ahmed Al-Hawamdeh & Iris H-Y Chiu, 2010. "Corporate Governance and Complexity Theory," Books, Edward Elgar Publishing, number 13927.
    11. Weinstein, Olivier, 2013. "Comment comprendre les « communs » : Elinor Ostrom, la propriété et la nouvelle économie institutionnelle," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 14.
    12. Robé Jean-Philippe, 2012. "Being Done With Milton Friedman," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-33, June.
    13. Dziri Houda & Jarboui Anis, 2017. "The venture capitalist’s cognitive approach: Validation through the Tunisian context," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1323371-132, January.
    14. Riccardo Ferretti & Pierpaolo Pattitoni & Alex Castelli, 2019. "Security-voting structure and equity financing in the banking sector: ‘one head-one vote’ versus ‘one share-one vote’," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 1063-1097, December.
    15. Fabrizio Rossi & Maretno Agus Harjoto, 2020. "Corporate non-financial disclosure, firm value, risk, and agency costs: evidence from Italian listed companies," Review of Managerial Science, Springer, vol. 14(5), pages 1149-1181, October.
    16. Aaron Bruhn & Anthony Asher, 2021. "The primacy of ethics in the provision of financial advice," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3305-3327, June.
    17. Butzbach Olivier & Rotondo Gennaro & Desiato Talita, 2020. "Can banks be owned?," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 10(1), pages 1-21, March.
    18. Carmelo Cennamo & Pascual Berrone & Luis Gomez-Mejia, 2009. "Does Stakeholder Management have a Dark Side?," Journal of Business Ethics, Springer, vol. 89(4), pages 491-507, November.
    19. Houda Dziri & Anis Jarboui, 2019. "The extent of social contribution of venture capital organisationsto funded financed companies," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 9(10), pages 293-304, October.
    20. Thomas Lamarche & Catherine Bodet, 2018. "Does CSR Contribute to Sustainable Development? What a Régulation Approach Can Tell Us," Review of Radical Political Economics, Union for Radical Political Economics, vol. 50(1), pages 154-172, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:aelcon:v:3:y:2013:i:1:p:43-60:n:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.