History & Area Studies / Thematic History / Economic History & Industrialization
Why British Companies Gave Power to Directors, Not Shareholders: The 1862-1929 Revolution
Timothy W. Guinnane, Ron Harris, and Naomi R. Lamoreaux challenge a century of legal theory. Their research on British company charters from 1862 to 1929 reveals a shocking truth: the common law system, praised for protecting shareholders, actually let founders strip investors of nearly all control. By analyzing hundreds of charters, they found that 90% of companies rewrote default rules to give directors absolute power—low quorums, secret finances, and self-dealing allowed. Investors traded oversight for high dividends. This wasn't a bug; it was the system's design. Watch to discover how 'contractual freedom' created corporate dictatorships, why big firms were worse, and what this means for today's governance debates. A must-see for anyone interested in law, economics, or the hidden history of capitalism.
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