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Extreme divorce: the managerial revolution in UK companies before 1914

By James Foreman-Peck and Leslie Hannah

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 £1 million or more quoted share capital in 1911), the generality of public shareholders were a narrower group than today, but directors personally owned only 3.4 per cent of the shares. This indicates a lower level of personal ownership (and board 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 subsequently quantified the US's later and (on this dimension) less advanced managerial 'revolution'. Their evidence was widely misinterpreted: some erroneously concluded that the US pioneered this aspect of 'modernity' and that the 'divorce' of ownership from control, globally, was a new and continuing trend

Topics: DA Great Britain, HC Economic History and Conditions, HD Industries. Land use. Labor, HD28 Management. Industrial Management
Publisher: Wiley on behalf of the Economic History Society
Year: 2012
DOI identifier: 10.1111/j.1468-0289.2011.00637.x
OAI identifier: oai:eprints.lse.ac.uk:40323
Provided by: LSE Research Online
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