The first session of the Legal History Workshop for 2013-14 will be held Monday, September 30 in room 15 of Mondale Hall from 1:25 to 3:25 p.m. At this session, Naomi Lamoreaux (Stanley B. Resor Professor of Economics and History, Yale University) will present "Contractual Freedom and the Evolution of Corporate Governance in Britain, 1862 to 1929."
Abstract:
The "law and finance" literature has stressed the superior flexibility of common-law regimes compared to civil-law regimes. British general incorporation law granted companies an extraordinary degree of contractual freedom to craft their own governance rules, but was this flexibility necessarily a good thing? In this paper we study the uses to which British firms put their contractual freedom by examining the articles of association written by three samples of companies from the late nineteenth and early twentieth centuries. We find incorporators used the flexibility of British law to write rules that shifted power from shareholders to directors, that the extent of this shift grew more extreme over time, and that Parliament made little effort to reverse it. Moreover, the expectation of having to go to the capital markets for funds does not seem to have much effect in moderating corporations' rule making. Although large firms were less likely to enact the most radical provisions, such as entrenching specific directors for life, they too wrote articles that gave managers largely unchecked control.
To view the paper she will be presenting, please click here. GHL, Contractual Freedom (18 Sept 2013).pdf
To view a full schedule for the fall workshops, click here. LHW FALL 2013 SCHEDULE.pdf
