Corporate Ownership and Control : British Business Transformed read online DOC, TXT
9780199236978 English 0199236976 The separation of the ownership from control of a company is a hallmark of many large UK companies, and has been so for nearly a century. Much contemporary debate over corporate governance assumes that this separation is the norm. However, quoted companies are much less common outside the UK and quoted companies in other jurisdictions often have one dominant shareholder, rather than being widely held. In this book, Brian Cheffins explores the historical foundations of the separation of ownership and control, asking how the widely held company came to prominence and why it has endured in the UK. He synthesizes existing theories on the evolution of ownership and control in the UK and assesses the extent to which they need to be revised in the light of new historical evidence. He provides the first systematic analysis of why and how the UK stock market came to be dominated by institutional shareholders and illustrates the development of key similarities and differences between the UK and US systems through comparative discussions. Being a blockholder in a large and successful business can provide the private benefits of control and the power associated with being a business leader, so why did those who traditionally owned large blocks of shares want to exit? Leaving one's savings in the hands of managers over whom one has no control seems foolish. Why were investors willing to buy the shares that the blockholders wanted to sell as ownership separated from control, and why have they continued to buy? As ownership separated from control in UK public companies, those who bought shares (including institutional shareholders, who had sufficient fiscal power to take a hands-on role with public companies) rarely sought to exercise control over management. Why was this? Even though the widely held company has been a key part of British capitalism for nearly a century, a series of prominent public-to-private deals carried out by private equity buyers mean that this trend may not necessarily continue. The concluding chapter of this book draws on the analytical framework used throughout to assess the possible future of the widely held company in the UK., The typical British publicly traded company has widely dispersed share ownership and is run by professionally trained managers who collectively own an insufficiently large percentage of shares to dictate the outcome when shareholders vote. This separation of ownership and control has not onlydictated the tenor of corporate governance debate in Britain but serves to distinguish the UK from most other countries. Existing theories fail to account adequately for arrangements in the UK. Corporate Ownership and Control accordingly seeks to explain why ownership became divorced from control inmajor British companies.The book is organized by reference to the 'sell side', which encompasses the factors that might prompt those owning large blocks of shares to exit or accept dilution of their stake, and the 'buy side', which involves factors that motivate investors to buy equities and deter the new shareholders fromthemselves exercising control. The book's approach is strongly historical in orientation, as it examines how matters evolved from the 17th century through to today. While a modern-style divorce of ownership and control can be traced back at least as far as mid-19th century railways, the'outsider/arms-length' system of ownership and control that currently characterizes British corporate governance did not crystallize until the middle of the 20th century. The book brings the story right up to date by showing current arrangements are likely to be durable. Correspondingly, theinsights the book offers should remain salient for some time to come.
9780199236978 English 0199236976 The separation of the ownership from control of a company is a hallmark of many large UK companies, and has been so for nearly a century. Much contemporary debate over corporate governance assumes that this separation is the norm. However, quoted companies are much less common outside the UK and quoted companies in other jurisdictions often have one dominant shareholder, rather than being widely held. In this book, Brian Cheffins explores the historical foundations of the separation of ownership and control, asking how the widely held company came to prominence and why it has endured in the UK. He synthesizes existing theories on the evolution of ownership and control in the UK and assesses the extent to which they need to be revised in the light of new historical evidence. He provides the first systematic analysis of why and how the UK stock market came to be dominated by institutional shareholders and illustrates the development of key similarities and differences between the UK and US systems through comparative discussions. Being a blockholder in a large and successful business can provide the private benefits of control and the power associated with being a business leader, so why did those who traditionally owned large blocks of shares want to exit? Leaving one's savings in the hands of managers over whom one has no control seems foolish. Why were investors willing to buy the shares that the blockholders wanted to sell as ownership separated from control, and why have they continued to buy? As ownership separated from control in UK public companies, those who bought shares (including institutional shareholders, who had sufficient fiscal power to take a hands-on role with public companies) rarely sought to exercise control over management. Why was this? Even though the widely held company has been a key part of British capitalism for nearly a century, a series of prominent public-to-private deals carried out by private equity buyers mean that this trend may not necessarily continue. The concluding chapter of this book draws on the analytical framework used throughout to assess the possible future of the widely held company in the UK., The typical British publicly traded company has widely dispersed share ownership and is run by professionally trained managers who collectively own an insufficiently large percentage of shares to dictate the outcome when shareholders vote. This separation of ownership and control has not onlydictated the tenor of corporate governance debate in Britain but serves to distinguish the UK from most other countries. Existing theories fail to account adequately for arrangements in the UK. Corporate Ownership and Control accordingly seeks to explain why ownership became divorced from control inmajor British companies.The book is organized by reference to the 'sell side', which encompasses the factors that might prompt those owning large blocks of shares to exit or accept dilution of their stake, and the 'buy side', which involves factors that motivate investors to buy equities and deter the new shareholders fromthemselves exercising control. The book's approach is strongly historical in orientation, as it examines how matters evolved from the 17th century through to today. While a modern-style divorce of ownership and control can be traced back at least as far as mid-19th century railways, the'outsider/arms-length' system of ownership and control that currently characterizes British corporate governance did not crystallize until the middle of the 20th century. The book brings the story right up to date by showing current arrangements are likely to be durable. Correspondingly, theinsights the book offers should remain salient for some time to come.