The Unsung Activists: UK Shareholder Investigation Committees, 1888–1940

As companies became larger and shareholders more numerous in nineteenth early twentieth-century Britain, the conventional wisdom is that free-rider problem inhibited active shareholder participation. Discontented could sell market, but it was long before takeover bid mechanism facilitated removal of underperforming incumbent boards. We show, using a sample fifty cases period from 1888 to 1940, UK overcame by committees investigation on sufficiently large scale present credible threat board malfeasance. Although there corporate performance than governance, this aspect good governance plausibly contributed London's precocity divorcing ownership control domestic up World War II.