IDEAS home Printed from https://ideas.repec.org/p/hes/wpaper/0072.html
   My bibliography  Save this paper

UK Corporate Law and Corporate Governance before 1914: a Re-interpretation

Author

Listed:
  • James Foreman-Peck

    (Cardiff University)

  • Leslie Hannah

    (Cardiff University)

Abstract

The consensus among legal and economic historians that British law between 1844 and 1914 provided little protection to corporate shareholders is based on formal provisions in the Companies Acts. In fact these Acts applied only to companies registered by the Board of Trade. Moreover corporate law for statutory companies was codified in the Companies Clauses Consolidation Act of 1845. We show that, while the governance rules of private companies were largely unconstrained, for most of the Victorian period most capital in quoted companies (which were mainly statutory) scored highly on the "anti-director" rights index under mandatory rules. When registered companies came to dominate stock exchanges, nearer the end of the nineteenth century, they voluntarily adopted similar rules, which professionals serving the stock exchange and IPOs recognised had advantages for raising capital. The main exception was the omission of tiered voting rules (whose record in protecting minorities was at best debatable), in favour of one-share-one vote. Unlike the prevailing consensus, our reinterpretation is consistent with evidence on the large size of the London Stock Exchange and extensive divorce of ownership from control in listed UK companies before 1914.

Suggested Citation

  • James Foreman-Peck & Leslie Hannah, 2015. "UK Corporate Law and Corporate Governance before 1914: a Re-interpretation," Working Papers 0072, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0072
    as

    Download full text from publisher

    File URL: https://www.ehes.org/wp/EHES_72.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Turner, John D., 2017. "The development of English company law before 1900," QUCEH Working Paper Series 2017-01, Queen's University Belfast, Queen's University Centre for Economic History.
    2. Coyle, Christopher & Musacchio, Aldo & Turner, John D., 2019. "Law and Finance in Britain c.1900," QBS Working Paper Series 2019/11, Queen's University Belfast, Queen's Business School.
    3. Acheson, Graeme G. & Campbell, Gareth & Turner, John D., 2016. "Common law and the origin of shareholder protection," eabh Papers 16-03, The European Association for Banking and Financial History (EABH).
    4. Acheson, Graeme & Campbell, Gareth & Turner, John D., 2019. "Private Contracting, Law and Finance," QBS Working Paper Series 2019/05, Queen's University Belfast, Queen's Business School.
    5. Coyle, Christopher & Musacchio, Aldo & Turner, John D., 2019. "Law and finance in Britain c.1900," Financial History Review, Cambridge University Press, vol. 26(3), pages 267-293, December.

    More about this item

    Keywords

    Corporate governance; anti-directors rights; voluntary regulation;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hes:wpaper:0072. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Sharp (email available below). General contact details of provider: https://edirc.repec.org/data/ehessea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.