In the familiar Anglo-American model of corporate governance, shareholders have two important rights: (1) the right to control of a corporation and (2) a right to its profits. In addition, shareholders are the exclusive beneficiary of the fiduciary duty of management, which is to say that managers have a fiduciary duty to operate a corporation solely in the interest of the corporation and its shareholders. This model of corporate governance is commonly characterized as the doctrine of shareholder primacy. The role of shareholders in corporate governance can also be expressed by saying that shareholder wealth maximization is and ought to be the objective of a firm.

These features of the shareholder model of corporate governance appear to place shareholders in a privileged position in comparison ...

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