In many corporations, there is "separation of ownership from control." What does this mean?

Question

Quizplus · Accepted Answer

"Separation of ownership from control" means that the shareholders own the corporation, but they do not have direct control over the day-to-day operations. Instead, the managers of the corporation run the business and make decisions on behalf of the shareholders. This is the case in many modern corporations, where shareholders may not even know each other and cannot effectively control the company's operations without delegating that authority to managers. The board of directors is responsible for overseeing management and ensuring that they act in the best interests of the shareholders. However, the key point is that ownership and control are separate, with ownership resting with shareholders and control residing with managers.

In Many Corporations, There Is "Separation of Ownership from Control