Corporations and Their Governance Between History and Practice

Abstract

To talk about corporate governance means to talk about companies which are artificial persons created by law that often have a life beyond that of their members. The best definition of corporate governance is probably the system by which companies are directed and controlled and that definition, in our view, applies to all companies and not just to the large corporations with dispersed shareholders which during the two last decades gave rise to a vast literature and an intense debate on corporate governance. This debate in fact started from the practical need to protect shareholders from abuses of management in publicly listed companies with dispersed shareholdings which are normally called public companies in the US but which we prefer to call Berle-Means Corporations from the name of the authors who first described their characteristics in a famous book which is one of the classics of corporate governance.