Modern corporate-governance scholarship begins with a single book. Adolf A. Berle, Jr. and Gardiner C. Means published The Modern Corporation and Private Property in 1932, in the depths of the Great Depression. It remains the foundational treatise of the field, and the Berle-Means agency problem is the premise on which every subsequent phase builds.1 Berle and Means's central observation was that the modern public corporation suffers from a structural separation between ownership — held by tens of thousands of dispersed shareholders — and control — exercised in practice by a small group of professional managers. Because no individual shareholder has either the information or the incentive to monitor management closely, managers are largely free to act in their own interest rather than in the interest of the residual claimants whose capital they deploy.2
The implication for corporate law was direct. If shareholders cannot discipline managers through markets alone, then law has to do the work — through fiduciary duties enforceable in court, through the requirements of the corporate charter, and through the rules governing the election and removal of directors. The presumption that corporate law matters because someone has to discipline managers is the unquestioned premise on which every subsequent debate in this literature rests. The eight phases that follow are best understood as a long argument about how much it matters, in what form, and whether the empirical evidence ever caught up to the theoretical claim.