What term refers to the relationship between shareholders and management in a corporation?

The term that refers to the relationship between shareholders and management in a corporation is Corporate Governance. This concept encompasses the systems, principles, and processes by which a company is directed and controlled, highlighting how the interests of various stakeholders, particularly shareholders, are balanced with the goals of management.

Corporate governance establishes the framework for achieving a company’s objectives while ensuring accountability, fairness, and transparency in the company’s relationship with all its stakeholders, including shareholders, management, employees, customers, and the community. It plays a critical role in defining the distribution of rights and responsibilities among the different participants in the corporation, helping to foster a culture of ethical behavior and responsible decision-making.

In contrast, Corporate Law pertains to the legal rules that govern the formation and operation of corporations but does not specifically address the relationship dynamics of governance. Business Ethics focuses on the moral principles guiding behavior in the business context but doesn't specifically define the management-shareholder relationship. Stakeholder Theory, while it does consider the interests of various parties involved with a company, is broader and not exclusively about the relationship between shareholders and management.