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Extreme Divorce: the Managerial Revolution in UK Companies before 1914

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  • Foreman-Peck, James

    ()
    (Cardiff Business School)

  • Hannah, Leslie

Abstract

We present the first broadly representative study for any early twentieth century economy of the extent to which quoted company ownership was already divorced from managerial control. In the 337 largest, independent, UK companies in the Investor's Year Book (those with \pounds 1m or more share capital in 1911) the two million outside shareholders were fewer than today's shareholding population, but they held 97.5% of the shares in the median company and their directors only 2.5%. This indicates a lower level of personal ownership by boards, and of director voting control, in the largest securities market of the early twentieth century than in any of the world.s major securities markets toward the end of that century. Berle, Means, Gordon and others later quantified the USA's delayed (and on this dimension less advanced) managerial "revolution." Their evidence has been widely misinterpreted: some erroneously concluded that America pioneered this aspect of "modernity" and that the "divorce" of ownership from control, globally, was a new and continuing trend.

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Bibliographic Info

Paper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2011/21.

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Length: 54 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:cdf:wpaper:2011/21

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Cited by:
  1. Acheson, Graeme G. & Campbell, Gareth & Turner, John D. & Vanteeva, Nadia, 2014. "Corporate ownership and control in Victorian Britain," eabh Papers 14-02, The European Association for Banking and Financial History (EABH).
  2. James Foreman-Peck & Leslie Hannah, 2012. "Some Consequences of the Early Twentieth Century Divorce of Ownership from Control," Working Papers 0023, European Historical Economics Society (EHES).
  3. Turner, John D., 2014. "Financial history and financial economics," QUCEH Working Paper Series 14-03, Queen's University Centre for Economic History, Queen's University Belfast.

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