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Corporate Ownership and ControlBritish Business Transformed$
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Brian R. Cheffins

Print publication date: 2008

Print ISBN-13: 9780199236978

Published to Oxford Scholarship Online: January 2009

DOI: 10.1093/acprof:oso/9780199236978.001.0001

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The Separation of Ownership and Control by 1914

The Separation of Ownership and Control by 1914

Chapter:
(p.221) SEVEN The Separation of Ownership and Control by 1914
Source:
Corporate Ownership and Control
Author(s):

Brian R. Cheffins

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199236978.003.0007

Leslie Hannah has provocatively claimed ownership was divorced from control in large UK companies by the early 20th century, inviting re-examination of entrenched assumptions in so doing. This chapter shows his bold assertions need careful qualification. A listing rule of the London Stock Exchange that required companies seeking a quotation to offer two-thirds of their shares to the public prompted at least some unwinding of control. By 1914, major banks were joining railways as companies characterized by a separation of ownership and control, and there was some evidence of ownership dispersion among insurers. On the other hand, blockholding apparently remained prevalent in shipping and electricity companies. A case study of Britain's 15 largest industrial enterprises as of 1912 indicates the situation was the same in the industrial sector. Hence, Britain lacked an outsider/arm's-length system of ownership and control on the eve of the First World War.

Keywords:   London Stock Exchange, ownership structure, company law, mergers, railway companies, banking, insurance companies, shipping, electric utilities, industrial companies

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