Assertion (A)- In companies there exists separation of ownership from management.
Reason(R)- The shareholders are widely scattered, and they give rights to the managers to manage the company's affairs.

Both A and R are true. R is the correct explanation of A

Diffusion of ownership and management : In company form of organisation, there exists separation of ownership from management. As the shareholders could be scattered across country here, they give the right to the directors to manage the company's affairs.