Rutterford, Janette and Hannah, Leslie 
ORCID: 0000-0003-0839-7412
(2023)
The unsung activists: UK shareholder investigation committees, 1888–1940.
Business History Review, 96 (4).
741 - 775.
ISSN 0007-6805
Abstract
As companies became larger and shareholders more numerous in nineteenth and early twentieth-century Britain, the conventional wisdom is that the free-rider problem inhibited active shareholder participation. Discontented shareholders could sell in the market, but it was long before the takeover bid mechanism facilitated the removal of underperforming incumbent boards. We show, using a sample of fifty cases in the period from 1888 to 1940, that UK shareholders overcame the free-rider problem by using committees of investigation on a sufficiently large scale to present a credible threat to board malfeasance. Although there was more to corporate performance than corporate governance, this aspect of good governance plausibly contributed to London's precocity in divorcing ownership from control in domestic companies up to World War II.
| Item Type: | Article |
|---|---|
| Official URL: | https://www.cambridge.org/core/journals/business-h... |
| Additional Information: | © 2023 The President and Fellows of Harvard College. |
| Divisions: | Economic History |
| Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
| JEL classification: | G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General |
| Date Deposited: | 06 Dec 2023 00:16 |
| Last Modified: | 25 Apr 2024 17:09 |
| URI: | http://eprints.lse.ac.uk/id/eprint/120994 |
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