Political Science 2211E Lecture 9: week 9
4 Feb 2019
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Business is legally separate entity from owners/shareholders. Industrial revolution led to the emergence of big corporations. Many founded and run by individual industrialists known as "robber barons" Jp morgan financed mergers in rail and steel and set off m&a wave. Private corporations owned by individuals or families. Owners often specialized in the products they produced. Robber barons retired and sold their shares. Came to be owned by a large number of small, unconnected shareholders. Small number own shares - often person or family. Large number own shares; still private company - not gov owned. Ex: cbc, via rail: separation of ownership and control. Decentralized ownership meant owners no longer ran corporation. 1932 berle-means model of the modern corporation. Shareholders (large number of small and unconnected shareholders) -> board of directors (represent shareholders and oversee management) -> ceo and management (specialized management) Board of directors can veto management decisions. Shareholders can vote on certain decisions at agm or through proxy votes.
