Changing perspectives on the company and its enterprise, 1928-1971




In the 19th century, a company limited by shares (naamlooze vennootschap) was considered a contract among investors who had collected money or other goods, which was subsequently invested by the directors. The directors were considered agents (lasthebbers) of the collective shareholders who jointly constituted the company. The growth of certain enterprises as from the end of the 19th century allowed for a different perspective, which did not focus the company but on its enterprise. The enterprise was considered a cooperation between the production factors of capital, labor and management.

A different perspective could have consequences on the division of power among the interested parties: a focus on the shareholders’ interest, which logically followed from the traditional view on the company, was no longer self-evident as soon as the enterprise was considered a cooperation of the three production factors.

Although the Companies Act of 1928 was based in the traditional perspective, the prevailing opinion in the Netherlands changed after WWII. This ultimately resulted in an amendment of the Companies Act in 1971. The new Companies Act, amongst others, determines that the directors and supervisory directors shall be guided by the interests of the company and its enterprise. These interests include the shareholders’ interests, as well as the continuity of the enterprise and the interests of employees.

After having given an overview of the discourse in German, English, US and French literature on the relation between the company and its enterprise, this draft book chapter turns to the Netherlands. It analyzes how, in the 1950s, the contractual theory was left, while the company interest was still considered identical to the joint interest of the shareholders. Nevertheless, the position of shareholders was under pressure, not only de facto, as the result of growing separation between ownership and control and of various protective devises, but also de jure. The company no longer constituted a contract among shareholders, but it created a separate legal order, governed by autonomous directors whose position was no longer subordinated to the shareholders. It subsequently shows how, in the 1960s, Dutch company law accepted a pluralist approach as a result of which directors shall take into account the interests of the various stakeholders. The new views were finally laid down in a revised Companies Act which introduced the so called structure regime.



About Matthijs de Jongh
Matthijs de Jongh is a law clerk at the Supreme Court of the Netherlands since 2005. From 1999 through 2005, he practiced as a corporate lawyer in Amsterdam. Since 2008, he is writing a PhD on the history of shareholder control rights in Dutch listed companies. He has published on various topics of company law, including the Dutch East India Company, shareholder control rights before 1900, shareholder fiduciary duties, and company law and social entrepreneurship.



The Business History Seminar has been made possible by financial support from the Erasmus Research Institute of Management (ERIM) and the Erasmus School of History, Culture and Communication.
Contact information:
Marten Boon