The common view of the public corporation is that of an organization run by top managers, and monitored by a board of directors on behalf of public shareholders. The separation of decision management (the CEO) from decision control (the board) and from risk-bearing constituents (public shareholders) is thought of as a reasonable way to structure firms, and so long as decisions are made in the interests of the shareholders, efficiency is maximized.” [Acharya, Myers and Rajan, NY Stern School of Business]
Identify and explain clearly the theoretical arguments and empirical evidence in favour of and against this view, using appropriate examples to illustrate both sides of the argument.
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