The Essential Book of Corporate Governance

Throughout most of the 19th century, large-scale business enterprises were still owned and run mainly by their founders, often with capital and management provided by a closed group of private financiers who also served on their board. But towards the end of the century, to take advantage of economies of scale resulting from a wave of industrial revolution, such closely held companies increasingly chose to fund their now larger investments opportunities with public equity. Therefore, ownership of these companies got dispersed among millions of investors with relatively small holdings.