Control of corporate decisions: Shareholders vs. management

Milton Harris*, Artur Raviv

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

42 Scopus citations


This article addresses the issue of whether shareholders would be better off with enhanced control over corporate decisions. The issue has been hotly debated in the recent literature. Our main contribution is to use formal modeling to uncover some factors overlooked in these arguments. For example, we show that claims that shareholder control would reduce value because shareholders lack sufficient information to make important decisions or because they have a non-value-maximizing agenda are flawed. We also show, however, that even if shareholders seek to maximize firm value and can delegate decisions to management, shareholders should not control all major decisions.

Original languageEnglish (US)
Pages (from-to)4115-4147
Number of pages33
JournalReview of Financial Studies
Issue number11
StatePublished - Nov 2010

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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