Berle and Means’ The Modern Corporation and Private Property:The Military Roots of a Stakeholder Model of Corporate Governance

The Modern Corporation and Private Property by Adolf Berle and Gardiner Means (1932) remains one of the most cited works in management studies. Our paper shows that Berle and Means espoused a stakeholder theory of corporate governance that challenged the then-hegemonic idea that the sole purpose of a corporation is to create value for the shareholders. We argue that Berle and Means’ support for stakeholder theory can be associated with their earlier service in the U.S. military, an organization which then inculcated an ethos of public service in its members. Our paper, which is based on archival research in the Franklin Delano Roosevelt Presidential Library, seeks to relate changes in how U.S. military organizations have structured themselves with contemporaneous changes in the organization of private-sector firms.