Tuesday, July 29, 2008
Dobija on the history of corporate governance and the East India Company, 1600-1612
Emergence of Corporate Contract Set, Governance and Accountability: Standing Orders of the East India Company, 1600 - 1621 is new paper by Dorota Dobija, Kozminski Business School (Poland). Here's the abstract: Corporate governance has become an attractive topic for academic research, especially after several cases of corporate scandals at the beginning of the 21st century. Since then, much effort has been put into improving existing and inventing new corporate governance mechanisms as well as increasing accountability of managers to their stakeholders. However, this debate is not embedded in the contemporary world. Since their beginnings, companies have tried to design structures that would reduce, if not eliminate, the inherited problem of conflicts of interest among various participants. Business historians have documented that the development of various organizational forms was a result of the constant struggle to write more and more efficient contracts between firms' participants. The East India Company (EIC) was a precursor of the modern corporation working in a globalized world. As in any other organization, a group of investors combined their efforts to carry out a common purpose - trading to the East - and the members elected officers to carry out day-to-day management. This paper seeks a historical perspective on the emergence and development of various governance mechanisms in the EIC. The period of the analysis relates to the first twenty-one years of the EIC, from the first rules written in the Charter of Incorporation to the time when the Standing Orders of the EIC were published.