Extreme divorce: the managerial revolution in UK companies before 1914

We present the first broadly representative study for any early twentieth century economy of the extent to which quoted company ownership was already divorced from managerial control. In the 337 largest, independent, UK companies in the Investor’s Year Book (those with £1m or more share capital in 1911) the two million outside shareholders were fewer than today’s shareholding population, but they held 97.5% of the shares in the median company and their directors only 2.5%. This indicates a lower level of personal ownership by boards, and of director voting control, in the largest securities market of the early twentieth century than in any of the world’s major securities markets toward the end of that century. Berle, Means, Gordon and others later quantified the USA’s delayed (and on this dimension less advanced) managerial “revolution.” Their evidence has been widely misinterpreted: some erroneously concluded that America pioneered this aspect of “modernity” and that the “divorce” of ownership from control, globally, was a new and continuing trend