Conflicts between shareholders and directors over the distribution of power stretch back to the birth of the joint-stock economy in the seventeenth century. The new political economy that emerged in the mid-eighteenth century took managerial opportunism as a given among the list of features that were held to thwart “monopolistic” joint-stock companies. As a result, the company constitutions of the eighteenth century attempted to keep opportunities for corruption to a minimum. The principal safeguard was the sovereign power of the general meeting (GM). The GM appointed and dismissed directors and managers, it audited accounts, and it was the public forum in which all interests in the company, large and small, came together to exercise their will. Mismanagement would be discouraged because the behavior of all agents would come under the close scrutiny of the GM, and problems would thus be resolved. These provisions may not always have worked, but they demonstrate an awareness among company promoters of the need to achieve a constitutional balance between the executive, in the form of directors and managers, and the legislature, in the form of the body of shareholders assembled at the GM. The pervasiveness of political metaphors in the pamphlet literature and procedural records of joint-stock companies is evidence that these balances were viewed in political terms, reflecting the reshaping of the governmental landscape—national and local—in the same period.
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