A Primer on Corporate Governance, Second Edition, 2nd Edition

Chapter 2

Governance and Accountability

Who Owns the Corporation? The Legal Debate

Do shareholders own the company? To most people, this idea is so axiomatic that the question hardly seems worth asking. However, the long-simmering debate about the age-old argument over the board’s responsibilities to shareholders versus the rights of all company stakeholders flared up again recently, drawing attention once again to that central question (Figure 2-1).¹

Figure 2-1. Corporate stakeholders.

Not long ago two leading corporate governance experts—Lucian Bebchuk, Harvard Law School professor and ardent shareholder-rights proponent, and Martin Lipton, ...