Although Berle and Means’s work was intended to redirect the governance of corporate affairs away from furthering private cupidity and toward advancing public policy, their insights have done more harm than good; they have tended to reinforce the primacy of private cupidity or, perhaps more accurately, allowed subsequent theorists to prefer the pursuit of private cupidity by equating it with the development of public policy. This is not only unfortunate, but also unnecessary. Although Berle and Means’s The Modern Corporation forms the bedrock of the prevailing paradigm in corporate law and governance, it also contains some very suggestive materials from which to construct an alternative and more democratic way of proceeding that actually subverts and transforms the established model. This Article seeks both to celebrate The Modern Corporation, but also to lament the enduring influence of its received understanding on corporate law scholarship and practice. If The Modern Corporation is to avoid becoming “defunct” and remain relevant to contemporary ideas and practice, it must be more as a conceptual corrective and less as a traditional prop for the prevailing paradigm of corporate governance. After offering a different and more democratic inspired reading of The Modern Corporation the Article examines how it might be feasible to move from the present situation of corpocracy to a future milieu of democracy. Finally, the Article lays out the main features of a democratic agenda for reforming corporate governance.
Allan C. Hutchinson, Hurly-Berle—Corporate Governance, Commercial Profits, and Democratic Deficits, 34 SEATTLE U. L. REV. 1219 (2011).