Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Accounting, Economics, and Law: A Convivium

Ed. by Avi-Yonah, Reuven S. / Biondi, Yuri / Sunder, Shyam

See all formats and pricing
More options …

Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond

Olivier Weinstein
Published Online: 2012-06-08 | DOI: https://doi.org/10.1515/2152-2820.1061

Over the last thirty years, the shareholder conception of corporate governance has established itself as the foundation of the power structure and management principles of the corporation. It is based on a specific theorization of the firm: agency theory. Our aim is to explain the full significance of this theorization, by considering the context in which it was developed and the project – of a fundamentally political nature – that it conveys. For that purpose, we return to the questions raised during the first half of the twentieth century, in the seminal book of Berle and Means and in subsequent works by Berle; questions of a much broader scope that the relationship between shareholders and managers. We will show that agency theory can be considered a response to the most important ideas advanced by Berle and Means, and then by Berle (and others), after the New Deal and the Second World War. Comparison of these two themes of reflection leads us to identify two theorizations, and two radically different conceptions of the firm and the corporation. To address these issues, we start by considering the questions raised in the early twentieth century about the nature of the corporation and the status of managers; and how, in response to these questions, Berle constructed a certain conceptualization of the corporation and of managerial capitalism; we shall then revisit the contract-based approach of Jensen and Meckling, to assess the theoretical and ideological content and show how it was actually strongly opposed to Berle’s vision. Lastly, by way of conclusion, we shall endeavor to show how the opposition between these two theorizations should be seen, above all, as an opposition between two theories that are both “performative” rather than positive, and that the apparent success of agency theory and the dominance of shareholder primacy in corporate governance can only be understood in an institutional and political perspective.

Keywords: Berle; theory of the firm; corporate governance; corporate social responsibility; agency theory; corporate governance; corporation; theory of the firm; contractual theories; agency theory; law and economics; ownership and control; property rights; shareholder primacy; power; real entity; institutional economics

About the article

Published Online: 2012-06-08

Citation Information: Accounting, Economics, and Law, Volume 2, Issue 2, ISSN (Online) 2152-2820, DOI: https://doi.org/10.1515/2152-2820.1061.

Export Citation

©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

Catherine Bodet and Thomas Lamarche
Économie et Institutions, 2016, Number 24
Thomas Lamarche and Catherine Bodet
Review of Radical Political Economics, 2016, Page 048661341663503
Thomas Clarke
Society and Business Review, 2015, Volume 10, Number 3, Page 306
Olivier Butzbach and Kurt E. von Mettenheim
Accounting, Economics and Law - A Convivium, 2015, Volume 5, Number 2
Alice Klettner, Thomas Clarke, and Martijn Boersma
Journal of Business Ethics, 2014, Volume 122, Number 1, Page 145

Comments (0)

Please log in or register to comment.
Log in