About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

45 Harv. L. Rev. 1365 (1931-1932)
For Whom Corporate Managers are Trustees: A Note

handle is hein.journals/hlr45 and id is 1423 raw text is: FOR WHOM CORPORATE MANAGERS ARE TRUSTEES 1365 FOR WHOM CORPORATE MANAGERS ARE TRUSTEES: A NOTE T-HE administration of corporations- peculiarly, a few hun- dred large corporations - is now the crux of American industrial life. Upon the securities of these corporations has been erected the dominant part of the property system of the industrial east. A major function of these securities is to provide safety, security, or means of support for that part of the com- munity which is unable to earn its living in the normal channels of work or trade. Under cover of that system, certain individuals may perhaps acquire a disproportionate share of wealth. But this is an incident to the system and not its major premise; statistically, it plays a relatively minor part. Historically, and as a matter of law, corporate managements have been required to run their affairs in the interests of their security holders. From time to time other groups, notably labor, have asserted their claims; and these claims are receiving steadily greater recognition as a cost of industry. If these costs are not met, security holders receive an illusory additional profit. But the security holder's claim was the supposed main objective. Professor Dodd has challenged the theory.' He has stated his own thesis: The present writer is thoroughly in sympathy with Mr. Berle's efforts to establish a legal control which will more effectually prevent corporate managers from diverting profit into their own pockets from those of stockholders, and agrees with many of the specific rules which the latter deduces from his trusteeship principle. He nevertheless be- lieves that it is undesirable, even with the laudable purpose of giving stockholders much-needed protection against self-seeking managers, to give increased emphasis at the present time to the view that business corporations exist for the sole purpose of making profits for their stock- holders. He believes that public opinion, which ultimately makes law, has made and is today making substantial strides in the direction of a view of the business corporation as an economic institution which 1 For Whom are Corporate Managers Trustees? (1932) 45 HARv. L. REv. 1145.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most