Many people believe it is natural that stockholders have the right to control the firm whose stocks they hold. I think this belief is without basis. In this essay I examine two of the reasons which can be presented in support of stockholders' supremacy in the firm. The first is that they are the owners of the firm's assets. I doubt if this claim is legitimate, but even if it is, it doesn' t follow that they have the right to control the managers or employees; for it is one thing to own something, and still another to be entitled to control the person who uses it. The second is that the contribution of stockholders and the risks they take are very great. But managers and employees also contribute to the firm and take great risk. Therefore, it is doubtful whether stockholders' having the final say in the firm is legitimate.
