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This article investigates the relationship between ownership structure and corporate diversification strategy. It focuses on the potential conflict of interest between shareholders and managers regarding diversification, and tests the resolution of such conflict by shareholder monitoring and then by the alignment of managers’ behaviour with that of shareholders. The study is original in that it is conducted on a population of large French companies, makes a clear distinction between insider and outsider ownership, and compares related diversification strategies to conglomerate strategies. The research shows that the effect of monitoring by outside blockholders is clear, leading to related diversification at the expense of unrelated diversification strategies. However, an increase in managerial ownership, far from leading to alignment, leads to managerial behaviour that goes against the interests of shareholders and more precisely to unrelated diversification strategies.