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Corporate Governance and Corporate Failure in the Oil Industry: Historical Analysis of Anglo Iranian Oil Company

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  • Neveen Abdelrehim

    (Newcastle University Business School, UK)

Abstract

There has been much written about the nationalization of the AIOC in 1951. Many accounts have, perhaps unfairly, painted the directors of the AIOC as Imperialist stooges seeking to plunder the natural resources of another sovereign state to cement the United Kingdom’s geopolitical position in the Middle East. The main aim of this research is to employ historical analysis to address and scrutinize the corporate governance and corporate failure of AIOC, which led to the company’s nationalization. Analysis of archival material illustrates that the AIOC had not honored their commitments to various agreements for over 30 years preceding nationalization. Furthermore, from a range of evidence arising from the AIOC annual reports and historical sources including the British press, it can be clearly seen that the management regarded the shareholders’ interests to be superior and taking preference over the interests of Iranian and other stakeholder groups. Historical analysis should feature prominently in empirical accounting research, which is a major motivation behind this analysis. Longitudinal analysis of confidential documents and internal memos illustrates that the company was aware of various Iranians concerns as early as the 1910s, but through various strategies, management was able to deflect these concerns, the scale of which was often not well understood, ultimately leading to nationalization in 1951.

Suggested Citation

  • Neveen Abdelrehim, 2022. "Corporate Governance and Corporate Failure in the Oil Industry: Historical Analysis of Anglo Iranian Oil Company," Eurasian Journal of Business and Management, Eurasian Publications, vol. 10(3), pages 181-189.
    • Handle: RePEc:ejn:ejbmjr:v:10:y:2022:i:3:p:181-189
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    References listed on IDEAS

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    1. Abdelrehim, Neveen & Maltby, Josephine & Toms, Steven, 2011. "Corporate Social Responsibility and Corporate Control: The Anglo-Iranian Oil Company, 1933–1951," Enterprise & Society, Cambridge University Press, vol. 12(4), pages 824-862, December.
    2. Geoffrey Jones, 2010. "Multinational Strategies and Developing Countries in Historical Perspective," Harvard Business School Working Papers 10-076, Harvard Business School.
    3. Steve Toms & Mike Wright, 2002. "Corporate Governance, Strategy and Structure in British Business History, 1950-2000," Business History, Taylor & Francis Journals, vol. 44(3), pages 91-124.
    4. Hadi Salehi Esfahani & M. Hashem Pesaran, 2008. "Iranian Economy in Twentieth Century: A Global Perspective," Working Papers 452, Economic Research Forum, revised 09 Jan 2008.
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