Abstract
After World War II it became obvious that the American way of allowing an open and highly competitive economy was superior to the traditional German system of concentrated groups of companies, cartels, and regular government interference. For the organization of large firms it was the "Berle-Means" corporation1 which presented itself as the model for reforming German corporate law. In fact, the separation of ownership and control offered considerable advantages. Management functions were awarded on the basis of merit, abandoning the feudal rule of inheritance. Investors were able to reduce risk by diversification. The dispersion of ownership allowed managers to escape the control of banks or other financial institutions, enabling the corporation to become an autonomous player in competitive markets. Management had to serve the interests of all - and not only of big shareholders; it was held accountable by the judicial enforcement of fiduciary duties, the monitoring of independent directors and the emerging market for corporate control. Ernst Joachim Mestmacker had been the first German author to point to this model; in his path-breaking analysis he confronted the American public corporation with the corporatist German structures and suggested far-reaching changes, mostly following the American example.
Published Version
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