Corporation and Its shareholders: what should b-schools teach? (Colloquium)

Abstract

A corporation, in theory, is owned by its shareholders. That is to say, the shareholders contribute some of their money — often a paltry amount — to the equity capital of the corporation. They are presumed to bear a greater portion of the risks of running a firm (as compared to lenders, bondholders, etc.) and hence expect to be rewarded for this risk. They are supposed to own the corporation.