It is widely taken as a given that stockholder democracy is
a good thing. If stockholders are the owners of corporations,
they should have a way to express themselves, and democracy is
by far the best way to enable a widely dispersed group of
people to express themselves. But stockholders
don’t really 'own’ a corporation, and
it is not clear that letting them express themselves is always
a good thing.
At least since the mid-1930s, the predominant view has been
that a corporation is owned by its stockholders and controlled
by its managers (i.e., its directors and officers) as agents of
the owners. For the last 50 years that has been coupled with
the view that the principal objective of a corporation should
be to maximise profits for its stockholders. However, neither
of these may be correct.
In a recent article, John Macey, a highly respected...