For Whom are Corporate Managers Trustees

TL;DR: In this paper, it was shown that the managers of a corporation are fiduciaries for the unit and not merely for its individual members, in Mr. Young's phrase, trustees for an institution rather than attorneys for the stockholders.

Abstract: Directors and managers of modern large corporations are granted all sorts of novel powers by corporation statutes and charters, and are free from any substantial supervision by stockholders by reason of the difficulty which the modern stockholder has in discovering what is going on and taking effective measures even if he has discovered it. If the unity of the corporate body is real, then there is reality and not simply legal fiction in the proposition that the managers of the unit are fiduciaries for it and not merely for its individual members, in Mr. Young's phrase, trustees for an institution rather than attorneys for the stockholders. It may well be that any substantial assumption of social responsibility by incorporated business through voluntary action on the part of its managers cannot reasonably be expected.