Aim of the project
The project aims to describe and explain (1) to what degree listed companies in the Netherlands, the United Kingdom and Germany shifted towards shareholder primacy as the dominant model of corporate governance in the period from 1960 to 2000, and (2) how this shift affected the relationship between CEOs, employees, and Boards. 

Theoretical background
Between the 1970s and the 1990s many Western countries saw companies shifting from being working communities to becoming asset bundles, and from adhering to a stakeholder principle to a shareholder dominance. Many scholars and practitioners welcome this development (Deakin, 2005). They argue that shareholder primacy represents a superior form of corporate governance. It rests on the assumption that interest alignment between CEO and shareholders fosters firm efficiency. A board of directors (or Supervisory Board in a two-tier system) that is maximally independent from the CEO constitutes a key element of firms operating under principles of shareholder primacy. Independence, so the reasoning, efficiently reduces both agency costs and conflicts of interest between the CEO and the Board. This account has been challenged both on theoretical and empirical grounds (Rebérioux, 2007). Whereas board independence may reduce conflicts of interest, it also widens the information gap between the board and the CEO, thereby weakening a board’s effective control.

The present research project focuses on the position of the CEO and how this position shifted with the transition from stakeholder to shareholder primacy as the dominant governance principle. A working hypothesis for this project is that the board’s role vis a vis the CEO transformed from a primus inter pares in the process of strategy formulation, to a relationship of control. A growing gap between CEO, Board and employees should be the result. This gap, in turn, is expected to undermine cooperative relations between the involved stakeholders, and ultimately have a negative impact on the firm’s value creation.

Research design
This process will be investigated for the period 1960-2000, for listed companies in three countries (the Netherlands, the United Kingdom and Germany), with each their own characteristics in business organization and national context (e.g. legislation). The comparison allows for identifying the crucial elements in this development and its effects.

The sources are annual reports, newspapers, minutes and other archival sources.  Annual reports of Dutch listed firms are digital available at Utrecht University for the period 1975-2008. The annual reports for UK and German firms are online mainly for the period 2000 up to the most recent year. The website allows for searching in Dutch newspapers over time. Minutes of meetings can be consulted on a case basis (see e.g. The sources are investigated by historical methods, possibly combined with network analysis.

In order to assess the widening gap and erosion of cooperative relations between CEO, Board, and employees, indicators will be constructed based on, among others, the wording of annual reports of companies, the practices of consultation between board and employees, their mutual and overlapping relations, the practices of collective labour agreements, the differential in pay between CEO and average employees, and the shares of company profits allocated to real investments, shareholders and employees.

To measure the effects of these changes we look at cases of corporate failure and/or M&A over time and analyze the changing influence of the CEO, Board and employees on the process. For example in the Netherlands managers and supervisors are legally obliged to balance the interests of all stakeholders, including the employees’. In practice, with Dutch firms increasingly in the hands of foreign investors, the influence of the employees seem to have diminished though.

Bojken Gjoleka

Prof. dr. Bas van Bavel
Dr. Gerarda Westerhuis
Prof. dr. Rafael Wittek 

University of Utrecht, Economic and Social History Group 

History, Sociology

October 1, 2018 - September 30, 2022


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