Shareholder Primacy and the Distribution of Wealth

Ireland, Paddy (2005) Shareholder Primacy and the Distribution of Wealth. Modern Law Review, 68 (1). pp. 49-81. ISSN 0026-7961. (doi: (Full text available)

Download (387kB) Preview
Official URL


In recent years a growing consensus has emerged in favour of the shareholder-oriented model of the corporation. Increasingly, this model is justified not on the basis of shareholder ownership rights but on efficiency grounds: whoever the immediate and direct beneficiaries of shareholder-orientation, it is argued, it ultimately indirectly benefits everyone by ensuring the maximization of aggregate social wealth. The prevalence of this view has caused the distributional dimensions of corporate governance to be neglected. This paper examines the distribution of share ownership and financial wealth in the US and the UK. Although share ownership has become more widely spread, it argues, it remains very heavily concentrated with the result that shareholder primacy is in reality the primacy of a small privileged elite. After an exploration of the contradictions of working class shareholding and the impact of greater shareholder-orientation on the distribution of wealth, the paper concludes by re-evaluating Hansmann and Kraakman's 'end of corporate history' thesis, arguing that recent developments represent a triumph not for efficiency but for the growing power of the shareholder class.

Item Type: Article
Additional information: The definitive version is available at
Subjects: K Law
Divisions: Faculties > Social Sciences > Kent Law School
Depositing User: A. Davies
Date Deposited: 19 Dec 2007 19:20 UTC
Last Modified: 05 Sep 2011 23:25 UTC
Resource URI: (The current URI for this page, for reference purposes)
  • Depositors only (login required):