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Shareholder Democracies?

Corporate Governance in Britain and Ireland before 1850

Understanding the challenges of corporate governance is central to our comprehension of the economic dynamics driving corporations today. Among the most important institutions in capitalism today, corporations and joint-stock companies had their origins in Europe during the seventeenth and eighteenth centuries. And as they became more prevalent, the issue of internal governance became more pressing. At stake—and very much contested—was the allocation of rights and obligations among shareholders, directors, and managers.

This comprehensive account of the development of corporate governance in Britain and Ireland during its earliest stages highlights the role of political factors in shaping the evolution of corporate governance as well as the important debates that arose about the division of authority and responsibility. Political and economic institutions confronted similar issues, including the need for transparency and accountability in decision making and the roles of electors and the elected, and this book emphasizes how political institutions—from election procedures to assemblies to annual reporting—therefore provided apt models upon which companies drew readily. Filling a gap in the literature on early corporate economy, this book provides insight into the origins of many ongoing modern debates.

360 pages | 18 line drawings, 20 tables | 6 x 9 | © 2011

Economics and Business: Business--Industry and Labor, Economics--History

History: British and Irish History


“The struggle over political representation in Britain is more than the well-known story of parliamentary reform culminating in the Great Reform Act of 1832. It was about representation in a plethora of bodies, such as charities or improvement commissions that responded to the problems of an urban and industrial nation—and, as this excellent book shows, it was also about representation in joint-stock companies. The findings will be of great interest not only to business historians interested in corporate governance in the Industrial Revolution, but to anyone interested in wider issues of power and representation in the eighteenth and early nineteenth century. This book is a major contribution to the debate over what kind of democracy is needed within a capitalist economy.”

Martin Daunton, University of Cambridge

“Shareholder Democracies? reconstructs in rich detail the early stages of industrialization, when money and voting intersected against the backdrop of an uncertain legal framework and a thriving culture of political participation among middle-class investors. The authors add impressive archival breadth and depth to what we thought we knew about the timing and contours of ‘joint-stock politics’ up to 1850—including the wide variety of corporate constitutions, the numerous arrangements for electing boards, and the increasingly inadequate strategies for rendering boards accountable once elected.”

Timothy Alborn, author of Regulated Lives: Life Insurance and British Society 1800-1914

“Truly impressive. Mark Freeman, Robin Pearson, and James Taylor have mined a wealth of sources in an extraordinary number of repositories to offer an unparalleled wealth of historical detail. Shareholder Democracies? represents a quantum leap in our knowledge of the governance of early joint-stock companies in Britain and Ireland from the early eighteenth to the mid-nineteenth century, and it will have strong appeal both to historians and contemporary analysts of corporate governance.”

Colleen Dunlavy, University of Wisconsin–Madison

"It is a remarkable fact that the years that saw the Industrial Revolution flourish in Britain were a time when British company law was relatively unfriendly to the needs of many entrepreneurs. Does this mean that British law and politics didn’t matter? Analyzing the impact of these forces requires an understanding of how firms were actually organized, and how the legal framework within which they operated shaped their development. . . . This is exactly what Mark Freeman, Robin Pearson and James Taylor have done for Shareholder Democracies? . . . A valuable contribution to the study of the history of the company in Britain."

Shareholder Democracies? rests upon an impressive empirical foundation enriched by the authors’ extensive acquaintance with business historiography. Through explication of many nuances and fine distinctions of company policies and practices across Ireland, Scotland, and Britain, Mark Freeman, Robin Pearson, and James Taylor address fundamental issues of internal distribution of power in companies, in particular the practical, bureaucratic, and legal divergence of managerial control from shareholder rights especially evident in large companies."

Reviews in History

“This is a well-written book and a pleasure to read, with fascinating anecdotes interspersed with factual information. It fills a large gap in the literature and links the work carried out on early eighteenth-century companies with the much larger literature on post-1850 corporate governance.”

Economic History Review

“Shareholder Democracies? is a path-breaking and important work, transforming our knowledge of British and Irish companies in the decades before the Companies Acts made the corporate form available by simple registration. . . . It offers a revealing counterpoint to recent articles by Colleen Dunlavy, Eric Hilt, Richard Sylla, Robert Wright, and others on early US corporations.”

Business History Review

“Much ink has been spilled on the corporate governance of modern enterprises; it is refreshing, therefore, to read this important historical contribution to a contemporary debate."

Australian Economic History Review

“A well-written and informative volume that provides a useful overview of many aspects of the development of the British company, as well as a detailed analysis of the changing nature of corporate governance. It should be read not only by economic historians but also by those seeking to understand the historical contexts of the latest in a long line of economic crises. It must give plenty of food for thought to those who believe that change in the structure of corporate governance is the solution to the problem of poor management.”

Journal for Eighteenth-Century Studies

Table of Contents

List of Illustrations

Chapter 1. Introduction
Chapter 2. The Joint-Stock Company and Its Environment, 1720–1850
Chapter 3. Company Formation
Chapter 4. Constitutional Rights and Governance Practice: The Executive
Chapter 5. Constitutional Rights and Governance Practice: The Proprietorship
Chapter 6. The Franchise and General Meeting
Chapter 7. Limited Liability and Company Dissolution
Chapter 8. Transparency and Accountability
Chapter 9. Conclusion



Business History Conference: Ralph Gomory Prize

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