Between Societas and Universitas. The Listed Company in Historical Perspective (Tussen Societas En Universitas. De Beursvennootschap En Haar Aandeelhouders in Historisch Perspectief)

Abstract

Conflicts between shareholders and the company are an inherent feature of company law. They do not only arise in case of mismanagement by the directors. Conflicts of interest between individual shareholders and the company or fellow shareholders also serve as an important source of shareholder revolts. These conflicts give rise to questions which are at the heart of company law: what is the relation between a shareholder and the company? What duties does a director owe his shareholders? How should the interest of the company be defined? Do directors need to take into account other interests than the company’s interest? Are shareholders well suited to prevent mismanagement by directors? May shareholders act solely in their own interest, or do they need to take into account the interests of others?

This is the English summary of a Dutch thesis which addresses these questions from a historical perspective. This book starts with the predecessors of the English and the Dutch East India Company, incorporated in 1600 and 1602, respectively, and ends with the current corporate governance debate. This study not only provides answers under current company law, but it also aims at deepening our insight into the evolution of company law, particularly with respect to the balance of power within companies. The focus is on Dutch law, but the argument is embedded in a broad international context, taking into account influences from other legal traditions, including the UK, the US, Germany and France.

Two legal forms, originating from Roman law, play an important role in this book: societas (partnership) and universitas (corporation). Both have historically influenced the development of company law. But they are also used as a metaphor for conflicts of interest between individual shareholders and the collective interest. The Roman societas attached great importance to the interests of individual partners, whereas the universitas has emphasised the interest of the institution as a whole. The book consists of five parts. Part I summarises the historical development of societas and universitas. Parts II-V chronologically analyse the development of the law on listed companies from the perspective of the relationship between shareholders and the company. Part V deals with the heart of the contemporary corporate governance debate.

Keywords: Shareholder Activism; Corporate Governance; History of Company Law; Board autonomy; Externalities

JEL Classification: B15, K20, K22, L20, L22, L32, M14, N13, N14