288 Index. Dutch West India Company (West-Indische Compagnie/ WIC), 15 17, 30, 42, 48 50, 68 69, 78, 92 charter, 50 51, 68, 69, 76, 85n60, 92

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1 Index agency relationships in companies, 152 see also principal-agent problems Amsterdam, 36 38, 42 as long-distance trade center, 35 Amsterdam Oude Compagnie, see also Verenigde Amsterdamse Compagnie Antwerp, Asia, early voyages to, bailies, , 227, 228nn2 4 Banner, Stuart, 236 Bebchuk, Lucian, 3 bewindhebbers, 36, 39, 40, 42 46, 49, 51 bondholders, 40 Britain, see England bylaws of firms, 234 capital shares and shareholders, Casa di San Giorgio, 148 charter amendments, 23, 68, 69, 76, 79 81, 130, 206, chartering activity, per capita, , 233f charters, business/corporate, 234 number of and authorized capitalization of, 232, 232f see also specific topics China, see Shanxi banks collegie, 37 commenda contracts, 8, 103 6, , 117 distribution over time, 106f unilateral vs. bilateral, 104 5, 106f Compagnia di Nostra Signora di Libertà (CNSL), , 158 Compagnia Marittima di S. Giorgio (CMSG), Compagnie française des Indes, see French East India Company conflict of interest, 153 conseillers/conselhans, 221, 225, 227 convoys, 106, , corporate governance, potential and limits of, 6 8 creditors, 30, 37, 64, 92, 107, 180, 201, 224, 225 rights of, 225 dead shares and shareholders, , 207 distribution of profits, 125, 149, 150, distributions, dividend, 64, 65, 67, 76, 80 divergence of interests problem, 193 Dutch East India Company (VOC), 29 31, 51 52, and admiralty for Asia, conflicting conceptions, directors, 46, 47, 65, as first modern corporation, 227 government-supported expropriation of minority shareholders, 91 financial and political consequences of, 92 94

2 288 Index Dutch East India Company (VOC) continued internal organization, Isaac Le Maire and, 1 2, 4 Johan van Oldenbarnevelt and, 1, 30, 38, 41, 45, 47 permanent capital at, protest of complaining participants, activism after prolongation of charter, categories of complaints, 69 conflicts of interest, 70 control rights, directors remuneration as source of agency conflicts, directors response, information asymmetries and insider trading, no rendering of financial account, proposals to revise charter, self-dealing, self-enrichment, shareholder abuse, 1 2 shareholders that have been insiders, 10 Dutch East India Company (VOC) Charter of 1602, 39 activism regarding, explanation for participants lack of control, position of participants under, proposals to revise, Dutch East India Company (VOC) Charter of 1623, Dutch East India Company (VOC) directors divide between other shareholders and, 42 insulation from shareholders, 12 prominent position of, Dutch West India Company (West-Indische Compagnie/ WIC), 15 17, 30, 42, 48 50, 68 69, 78, 92 charter, 50 51, 68, 69, 76, 85n60, 92 Eaton, Cyrus, 258 embezzlement, 102, 107 8, 110 England, 34 English East India Company (EIC), 12, 61, 66 control rights, VOC, and, corporate governance, 74, 96 directors, 94, 95 history, 90 investor-friendly governance structure, 95 permanent capital in, 17 18, renewed monopoly charter, 94, 95 shareholders, 74, state-sponsored expropriation and, 91 voyage-based capital structure, 94 English-India relations, 140n10 English merchants, 93, 112, 113 English system of Common Law, evolution of, 137 Enron, 284 entity-shielding and Toulouse companies, , Estates General, 31 32, 36, 38 41, 44 48, 50 engagement with, 280 Johan van der Veken and, 43 exit strategies, 43, 46, expertise shares and shareholders, , 201, 206 finance companies, 264, 265 fraternal partnership (fraterna), 109

3 Index 289 French East India Company explaining government participation in, , effective advocacy, 183 hidden agendas, governance, adequate financing, 178 agents who serve shareholders, 179 organizational stability, weak shareholders as cause of governance failures, Getty, J. Paul, 266 god of wealth account, 198 government as an aggrieved shareholder, appealing to, 11 see also state Gran Consiglio, 148 grand assessment day, 195 Groote Compagnie, 66 Holland, see also Dutch East India Company; Dutch West India Company; Netherlands Icahn, Carl, 253, 254 information asymmetries, 10, 31, 102, see also under Dutch East India Company; Venice inside directors remunerating themselves through related-party transactions, 10 International Paper Co., 266 investment companies/investment trusts, Italian companies, early, , agency problems in, 152 affiliation terms, appointment rights, decision rights, 155 directors constraints, incentives, 156 charters ( ), conflict between shareholders and directors or between majority and minority shareholders, development, legal transplants of foreign experiences in, 158 shareholders rights and determinants of shareholders powers, structure, 150 Kyakhta, 204 Law, John, Le Maire, Isaac, 4, 30, 278, 279 activism during VOC s first charter, corporate governance complaints, 50 investment techniques developed by, 280 lessons from, plea for shareholder rights, 1 2, 4 short speculations, writings, 278 Lei Lutai, Levant Company, 34 35, 40, 95 Li Daquan, 188, 205 Li Wudian, 201 livres tournois, 219 loans, 75, 147, 148, 176, 189, 192n, 222, 225, 244 see also maone; sea loans Lords IX (Heren), Lords XVII, 63 64, 79, 80 management control, 262 maone, , 158 Maritime Statutes of 1229, 115

4 290 Index maritime trade, 202, 204, 206 merger, see Virginia Company of London, consolidation and Morellet, André, mutual funds, 265 Nanking, Treaty of, 199 Necker, Jacques, , Netherlands, 63, 77, 78, 158 see also Dutch East India Company; Dutch West India Company; Holland Nootwendiger Discours, 71, 73, 78 offensive shareholder activism, bids for control using open market purchases of shares and, , 270f incidents of, 256, 256f interconnection and, 267, 267f and private benefits, rarity of institutional investor led, and takeovers, opportunism agent, 235 blockholder, managerial, , 237 on the part of incorporators (company founders), 236 pamphlet, shareholder activism by, see Dutch East India Company, protest of complaining participants pariage, 217, 218, pariers, , , 226 partenrederijen (shipping companies), 34 partijen (shares), 48 partnerships, stretch of traditional, pension account, 198 Phoenix Securities Corporation, 257 precompanies, 63 65, 67 principal-agent problems, 8 11, 234 railroads, 239, 240 Russia, Sandys, Edwin, 7, 124, Sarbanes-Oxley Act, 280, 285 sea loans, , 117, 119 distribution over time, 105, 106f self-dealing, 70 71, 92, 93, 153, 198, 238 Shanxi banks, , 190f 194f, harmony in equity, 189, incentive compatibility, jade parachutes, learning from history, opportunity in crises, shareholder advocacy contemporary issues in, value of historical perspective on, 2 6 shareholder engagement, modes of, 3 shareholder interests conflicting, 10 diversity, 10 shareholder structure, shareholders as insiders, 10 shipping companies, see partenrederijen Sicard, Germain, , 224, Simon, Norton, Smith, Adam, 235 Smith, Thomas, St. Petersburg, stakeholders, categories of, 40 state role in origins of corporations, 11 13

5 Index 291 state vs. corporate interests, States General, 63, 65 69, 75 76, States of Holland, Sunrise Provident Bank, 187, 188, , , 206 Sunrise Prudent Bank, 191f Tegen-vertooch ( Counter Remonstrance ), 71 Temporary National Economic Committee (TNEC), Tidewater Associated Oil Company, 266 tobacco exports from Virginia, 131n1, , 137, 138 Toulouse companies, entityshielding and, , Toulouse mills establishment of milling rights, governance of, evolution of, and political power, shareholder lawsuit in 14th-century, , aftermath and interpretation of, background, shareholders, transfer by sale, by vote, 267, 268 transferable shares and transferability of shares, 39, 40, 147, , 157 treasurers, Tweede Nootwendiger Discours ( Second, More Necessary Discourse ), 70, 74, 75, 78 uchaux, 223, United States, corporate governance and stockholder/stakeholder activism in ( ), U.S. Securities and Exchange Commission (SEC), 260, 264, 280 van Oldenbarnevelt, Johan, 1, 30, 38, 41, 45, 47 Venice, late-medieval, 102 3, 118 investor protection, poor legal protection of investor rights, private solutions limited role, regulations and litigation, accounting for development of bond and equity markets, mitigating asymmetric information problems via monitoring and gatekeepers, naval expansion and entry barriers as incentives to keep one s affiliation with Venice, Venetian securities market for overseas trade, Vereenigde Oost-Indische Compagnie (VOC), see Dutch East India Company Verenigde Amsterdamse Compagnie, 37 Verenigde Zeeuwse Compagnie, 38 Virginia Company of London (VLC), , 284 abuse of shareholders, 7 aftermath and legacy, agency problems in charter, conflicts of interests in corporate structure of, 7 consolidation and, merchant blockholders arrange the dissolution of ( ),

6 292 Index Virginia Company of London (VLC) continued origins and development of, and the context of shareholder activism, 125, f formation and initial disappointments ( ), 125, second charter and tobacco export industry ( ), reorganization, 130, 130f Sandys patriot faction removes Thomas Smith ( ), seal, 124f shareholder activism, 134, 136 tobacco export industry and, voorcompagnieën, 38, 43, 44 voting rules, 234, 240 West-Indische Compagnie (WIC), see Dutch West India Company