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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

(p.221) SEVEN The Separation of Ownership and Control by 1914
Corporate Ownership and Control

Brian R. Cheffins

Oxford University Press

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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