A survey of blockholders and corporate control. (Part 1: a review of the literature on corporate governance).

From: Federal Reserve Bank of New York Economic PolicyReview | Date: April 1, 2003| Author: Holderness, Clifford G. | Copyright information

1. INTRODUCTION

The notion of diffuse stock ownership is well entrenched among economists. It started with Adam Smith's legendary warning in Wealth of Nations about the "negligence and profusion" that will result when those who manage enterprises are "rather of other people's money than of their own." A century and a half later, another lawyer, Adolf Berle, along with a journalist, Gardiner Means, returned to the theme of diffuse stock ownership. Since the dawn of capit...

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