The board of directors is appointed by management. Its compensation is set by management. Management has the Board of Directors in its pocket. But the reality is quite different. Monks and Minow trace, step by step, court case by court case, the disintegration of accountability in the modern corporation.
People like to think that the power of management is balanced by the power of shareholders.
But today, any remaining accountability is little more than a vestige of the original contract, the last remaining trace of the myth that no one seems to want to give up. Monks and Minow describe in detail the tools that corporate managers developed during the 1980s to diminish the decision-making power of shareholders. They argue persuasively, and in detail, that today the modern corporation is run by management chiefly for the benefit of management. Though shareholders continue to benefit from profitable decisions, shareholders no longer call the shots. Management rules the roost.