Johnston, A. orcid.org/0000-0003-0824-7844, Segrestin, B. and Hatchuel, A. (2019) From balanced enterprise to hostile takeover: how the law forgot about management. Legal Studies, 39 (1). pp. 75-97. ISSN 0261-3875
Abstract
We show that professional management began to emerge in UK companies during the first half of the twentieth century, a development which was widely theorised and accepted. However, the managerially-led enterprise was accommodated rather than protected by company law, making it vulnerable to changes in the law. The Cohen Report of 1945 paid no attention to these developments, and led to the introduction, in the Companies Act 1948, of important, but previously little appreciated, changes in the name of enhancing the accountability of directors to shareholders. The shareholders’ statutory right to remove the directors by simple majority overturned existing structures overnight and was an important driver of the hostile takeover, which emerged shortly afterwards. This deprived management of the necessary autonomy to balance the competing interests at stake in the enterprise and to foster innovation. The emergence of the current system of shareholder primacy can be traced back to these developments.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 The Society of Legal Scholars. This is an author produced version of a paper subsequently published in Legal Studies. Article available under the terms of the CC-BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/). |
Keywords: | Company Law; Corporate Governance; Enterprise, Management; Hostile Takeover; Legal History |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > School of Law (Sheffield) |
Funding Information: | Funder Grant number European Commission - Horizon 2020 693642 |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 18 May 2018 11:06 |
Last Modified: | 03 Dec 2020 10:38 |
Status: | Published |
Publisher: | Cambridge University Press |
Refereed: | Yes |
Identification Number: | 10.1017/lst.2018.32 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:130941 |
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