Index

References to Notes will contain the letter ‘n’ following the Note number

accountability
of directors  42
of management to shareholders  36, 37
accounting and performance measurement  118, 130–46, 158, 224
accounting deficiencies  21–2
avoiding valuing that which cannot be valued  139–41
balance sheet paralysis  204
determining what is recorded in company accounts  130–4
fundamental principles so far not fully recognized  145–6
implementation considerations  145–6
infrastructure, not accounting for  210–11
limits  144
national accounts  135–7, 138, 207, 210–11, 219
profit maximization  131–2
recommended way to account  137
survival of firm  132–3
Acton, Brian  31–2
administration  14–15, 65–6, 82, 228
Africa  34
chocolate production  85
infrastructure  206, 207
mobile money  177, 183
Age of Enlightenment see Enlightenment, Age of
agency concept of firm  50, 104
agency problem  87, 166, 198
ages of the corporation  123–4
first  41
second  39, 41
third  39, 41, 202
fourth  39–40, 41, 124, 203
fifth  40, 41, 124
sixth  31, 41, 203
seventh  35, 44–5, 53
Akerlof, George
Phishing for Phools  55, 115, 235n7, 240n8
Alchian, Armen  234n6, 242n9
Alexander, Gregory  243n15
Allen, Woody  63
Alphabet (Google)  32, 33
altruism  47, 48, 58
Amsterdam, development of financial institutions in  80
Antwerp, Belgium  80–1
Apple  172
articles of association  202, 214, 225
artificial intelligence  13, 45, 54, 124
Asian financial crisis  87, 115
asset management  179, 180–2
asset-backed commercial paper  175
assets  4, 34, 87 see also asset management
contribution to corporate purpose  134
intangibles  21, 31
non-material, recognition of  134–5
Babylonian partnership  69
Bae, Kee-Hong  238n13
balance sheets  21, 42, 158, 174, 175, 190, 198
balance sheet paralysis  204
infrastructure  207, 211
national  140, 174, 211, 219
performance  131, 136, 140, 143, 145, 146
banks  24, 42–3, 79–81
Bank of Amsterdam  80, 81–2
Bank of England  93, 191
central banks  194
dependence of SMEs on  191, 193
disintermediation  169, 171–3, 183
failures  93, 194–5, 225, 226
formal  170, 176
Germany  95
Handelsbanken (Swedish bank)  56, 192, 194, 195
Japan  96, 97, 114
lender-of-last-resort facilities  170, 174, 176–7
purpose of finance  168–9
regulation of  171, 225
shadow banking  24, 25, 170, 173–7
theories of banking  173
United Kingdom  92–3, 94, 193
United States  168–9, 171, 174
Barnett, Henrietta  85
Baron, Matthew  241n28
Barton, Dominic  120, 240n12
Basel III  171
Bassen, A.  241n22
Becht, Marco  238n21
Behan, Dominic  109
Beltratti, A.  239n7
benefit corporations  42–3, 157, 201, 214
Berle, Adolf  87, 97, 105
Bertelsmann  121–2, 162
bills of exchange  80
biological perspective  13, 46–9, 53, 59, 82 see also evolution of corporation
Blackrock  120
Blair, Margaret  242n7
block holders  90, 98–100, 112, 196, 199, 223
Bloom, N.  241n27
boards, company  19, 36, 114, 121
Bonaparte, Napoleon  239n27
bond markets  171
Borsting, Christa  234n12
Bosch  121–2, 162
Bourneville, England/Bourneville Village Trust  84, 105
Bourse, the  80–1, 82
Brin, Sergei  32, 43, 91
Bruges, Belgium  72, 80
Busch, T.  241n22
business coordinators, Japan  96
business groups  98, 99, 238n22
business schools  16, 36
businesses see corporations; firms
Cadbury (family-owned company)  85–6, 89, 91
acquisition by Kraft (2010)  37, 38, 86
going public  87
merger with J.S.Fry and Sons  86
merger with Schweppes  87
Cadbury, Adrian  86, 233n7
Cadbury, Deborah  237n1
Cadbury, George  84, 89, 105
Cadbury, Richard  84
Cadbury Commission  19
Cadbury factory, Somerdale  37, 38
Cambridge University  66, 70
canon law  67, 68, 228
capital
committed  163
financial see financial capital
human see human capital
intellectual  41, 42, 49, 124
maintenance  224
material  41, 42, 132, 224
natural see natural capital
permanent  48
physical  132, 133
raising of  82
scarcity  127, 224
social see social capital
spiritual  123
Capital Markets Union  189
capitalism  36, 42, 112
Carlsberg  121–2, 162
Catholic Church  66, 67, 68
Célérier, Claire  246n14
cell phones  32
Charles I  80
cheques  80
chief executive officers (CEOs)  115–16
China
growth of  34
infrastructure  206, 207
investor protection  198
pollution  34
public–private corporations  215
state ownership  90, 223
chlorofluorocarbons (CFCs)  141
chocolate
Cadbury’s Dairy Milk  89
Mars bar  86
Milky Way bar  86, 89
production of  85
Snickers bar  86, 89
Civil Law  65
clash of civilizations  221
Coase, Ronald  36, 37, 87, 234n5
Coffee, Jack  112, 239n3, 243n16
Coleridge, Samuel Taylor  167
collegium  64, 73
commenda partnership  71, 73, 74
evolution into perpetual stock corporation  81–2
commerce  55, 69, 71, 76
commitments see corporate commitments
communal commitments  152, 159
community, one’s contribution to  11
compagnia (partnership of relatives)  71, 72, 82
companies see corporations; firms
Companies Act 1948, UK  94
Companies Act 2006, UK  110, 111, 113, 157, 200–1
competition  2, 7, 47, 48, 52, 53
consciousness, corporate see corporate consciousness
conservation  143
contracts  8, 10, 37, 54, 147
binding  163
and corporate commitments  152, 153
and corporate law  150, 156
enforcement  153, 217
and evolution of corporation  63–4, 69, 71
fixed-price  107
and incentives  153
infeasible  44, 156
and investment  213, 216
limitations  153
long-term  190
nexus of  37, 39
social  187
control
allocation of  125
hostile takeovers  126
separation from ownership  3, 4, 33–4, 38, 39, 60, 81, 87
transfers of  125–6
cooperation, in economics  47–8
Coricelli, Fabrizio  245n5
corporate commitments  4, 22, 39, 41, 60, 160–1, 166 see also corporate law
ability to commit  154
capability of corporation  154
communal  152, 159
concept  150, 151–6
creation  155
failures  227
forms  150–1
private-sector commitment  213–15
public commitment  211–13
self-regarding  152, 155, 159, 163
social  153
statements  159
corporate consciousness  13, 47, 50–4, 60
determination of value  51, 52–3
living organism concept  53
corporate cultures  12, 13, 14, 122–3
corporate governance  13, 16, 19, 23, 109–29, 192
adaptation  224
articulation, accountability and attribution  159
and corporate law  149–50, 155, 159, 165
corporate social responsibility (CSR)  17, 122
corporate sustainability  122
customer satisfaction  122
and delivery of company purpose  33, 36, 113–14, 115
‘doing well by doing good’  6–7, 115, 116–19, 129
eco-efficiency  122
environmental, social and governance (ESG)  122
evidence  122–4
and finance  193, 195
idiosyncratic value  223
long-term investment  120–2
materiality  122
and ownership  154–5
performance measurement  118
prescriptive codes, risks of formulating  115
of purpose  129
shareholder value goal, limitations of  113–15, 123, 125, 128
shortcomings in management  115–16
standard bearers  114
thesis  125–9
traditional view  149–50, 193
UK Corporate Governance Code  113, 114
corporate law  8, 22–3, 224, 225
commitments see commitments
confirmation  159–64
consequence  164–5
context  149–51
and corporate governance  149–50
and creation of corporation  149, 156–9
functions  149, 150
incorporation of corporate purpose into  23–4
misconception regarding nature and role  150
corporate purposes  7, 12, 13, 21, 24, 31–45, 109–12, 222, 224–5, 229 see also corporate governance; corporations; firms
assets contributing to  134
conflicting with wider interests of society  22–3
contemporary corporation  31–5
corporate governance and delivery of purpose  113–14, 115
diversity  115
evolution of corporation see evolution of corporation
governance of  129
incorporation into articles of association  202, 225
incorporation into corporate law  23–4
loss of public sense of purpose  83
maximization of shareholder value/making money for shareholders (limitations of)  2–3, 5–7, 39, 42, 110–16
normative conceptualization  110, 111
as objectives of company  7
original purpose of corporation  82
positive conceptualization  110
vs. product  9–10
profits/profit maximization, overemphasis on  8, 9, 109, 142, 228
rationale for company’s existence  5–6, 87, 109
trustworthiness  40–4
value proposition  109–10
corporate social responsibility (CSR)  17, 117, 122
corporation tax  26, 197
corporations see also firms; shareholders
benefit corporations  42–3, 157, 201, 214
benefits created by  1, 4, 38
biological perspective  13, 46–8, 49, 53, 59, 82
challenges facing  1–2
commitments see commitments
corporate consciousness see corporate consciousness
corporate law creating  149
corporation sole  68, 81, 236n14
creation, and corporate law  149, 156–9
evolution of see evolution of corporation
failings  1, 4, 39, 41, 45
fifth age  40, 41, 124
financialization  16, 38
first age  41
fourth age  39–40, 41, 124, 203
functions  4, 22
income disparities within  34
inhumane nature of  45
as instruments of king and parliament  33, 53
intellectual history  35, 37
joint-stock  35, 36, 74, 79
legal personality  38
liabilities  157–8
marketplace compared to  35, 36, 37
mindful  12, 32, 33, 35, 38, 45, 49, 124, 203, 224
municipal  65–6
nexus of relations  39
origins  63–4
partnerships distinguished  49, 78–9
private  8, 53, 111, 128
privileges received by  27
prospects for  221–32
publicly owned  36, 38, 68, 101, 218
purposes see corporate purposes
rationale for existence  5–6, 87
repositioning of  5
requirements  158–9
role in contemporary society  33
Roman origins as provider of public works  28
second age  39, 41
securitization  38
separation of ownership from control  3, 4, 33–4, 38, 39, 81, 87
seventh age  35, 44–5, 53
sixth age  31, 41, 203
state as a corporation  25
successful  40–1, 228
third age  39, 41, 202
transnational  33, 34, 40, 41, 43
trusted  40–4
trustworthiness see trustworthiness
values see values
Correia da Silva, Luis  245n10
Crassus, Marcus Licinius  65
credit transformation  173, 174
Crisp, Roger  242n6
crony capitalism  87
crowdfunding  171, 182, 183
Cujaz, Jacques  235n5
cum panis  71, 82
Davies, Paul  243n11
De Roover, Raymond  236n23
debt finance  190
deception  54–5, 57, 115
Dehing, Pit  237n46
DeLong, Bradford  238n21
Demsetz, Harold  234n6, 242n9
Deng, X.  241n24
directors
accountability of  42
block holders  112
fiduciary duties  42, 43, 111
nomination committees, election of directors  121, 122, 212
remedies against  158
and shareholders  111
disintermediation  169, 171–3, 183
diversity  5, 22, 26, 151
corporate forms  165, 200, 222–3
corporate governance  114, 115
law  222, 225
measurement  160
ownership  16, 225
and values  49, 50, 56, 60
‘doing well by doing good’  6–7, 115, 116–19, 129
dotcom bubble, bursting of  113, 114
Dow Chemical Company  112
dual-class share structures  91, 92, 98, 125
Dubois, Armand  237n42
DuPont (US corporation)  111–12
East India Company  74–8
Dutch East India Company  74, 75
English East India Company  74–5
East Indies  74–5
Easterbrook, Frank  234n7
Eccles, Robert  240n16, 240n19
economic deprivation  17
economics
and biology  47, 48
cooperation in  47–8
Economist, The  36, 40
Edmans, Alex  241n25
Edward III  72
Einstein, Albert  130
Ellul, A.  246n9
employment  17
enabling legislation  157, 158, 165, 200
English Law  65
Enlightenment, Age of  12, 35, 45, 228
entrepreneurs  17, 18, 44, 88, 90
‘uplifters’ (micro-entrepreneurs)  117
environment
accounting for  130, 131
environmental, social and governance (ESG)  122
equity finance  195–6, 199, 202
ethyl  141
Eurobond market  171
European Bank for Reconstruction and Development (EBRD)  217
European Union
infrastructure  206
evolution of corporation  13, 14–16, 63–83, 222 see also biological perspective
canon law concept  67, 68, 228
and corporate purpose  33, 34, 35–40
diversity  49
guilds  73–4
Islamic influence  68–70
medieval litigation  67
origins  14, 63
Roman period  28, 63–8
societas  63–4, 73, 74
societas publicanorum  64, 65, 69, 70, 73, 81, 82
super-companies (Italian)  71–2
thousand years of corporations  81–3
towns and universities  65–6
universal origin of concept of business  82–3
and values  52
waqf (unincorporated trust)  69–70
exchange-traded funds (ETFs)  179, 196
executives  3
externalities  143
Facebook  31, 32, 33, 43, 91
fair or fake profits  20–1, 133, 141, 142
family businesses  15, 97, 107, 196, 222, 223 see also compagnia (partnership of relatives)
ownership  82, 85–7, 94–102, 106, 120, 166
values  53, 56, 72
Fannie Mae  174
fiduciary duties  27, 154
breach  111
of directors  42, 43, 111
finance  167–8, 189–205 see also banks; financial capital; financial institutions; financial reporting; financial systems
borrowing  173
computer-driven  169
corporate sector  190–1
equity finance  195–6, 199, 202
external financing  168, 202
financial development  168
financial policy, putting right  204–5
integrating with investment  203–4
and investment  27, 227
long-term debt  190
market-based  172, 173
public markets  196
purpose  168–71
risk committees  192–4, 195
taxation  26, 76–7, 197–8
financial capital  18, 19, 20, 21, 41, 49, 224
administration combined with  14–15, 82, 228
corporate governance  120, 123, 124
historical changes  202–3
performance  132
financial crisis (2008)  1, 24, 25, 37, 93, 166, 189, 190, 193, 194
and regulation  175, 180
response of regulators to  225–6
financial institutions  24–6, 80, 86, 121, 194, 201, 204, 232
failure  175
regulation  168–70, 172, 175, 176, 178, 181–4, 187, 188
financial reporting  21, 131
financial systems  24, 45, 56, 189, 190, 195, 198, 201, 202, 204, 226
functions  171
and ownership  92, 95
and regulation  168, 171, 172, 175–8, 182, 183, 184
risk management  178
role  25–6
financialization  16, 38
‘fintech’ (computer-driven finance)  169
firms  3, 8, 16, 41 see also corporations
agency concept  50
Anglo-American system of ownership and control  60
assets see assets
biological perspective  13, 46–8, 49, 53, 59, 82
business practice  16–17
dynamic nature of  47, 49
executives  3
family firms see family businesses
history  17
legal borders  134
mechanistic view of  47–50
multi-faceted nature of  13
‘nexus of contracts,’ firm as  37
property view  3, 133–4
purpose of see corporate purposes
rationale for existence of companies  5–6
reinterpreting role of  47
responsibilities of those running  3
separation of ownership from control  3, 4, 33–4, 38, 39, 60, 87
social media companies  32–3
structure of companies  7, 60
survival  132–3
traditional engineering analogy  46–7, 48
values  141
Fischel, Daniel  234n7
flourishing  34, 42
foraminifera and algae, endosymbiotic relationship  13, 46–7, 48, 49, 54
Ford, Henry  88, 89, 91, 92, 100–1, 103, 104
Ford family  90, 91–2
Ford Motor Company  88
Formica Group  151, 159, 160, 161
Fornell, C.  240n20
Frankl, Victor  10–11, 233n6
Franks, Julian  238n14, 238n18, 238n20, 239n25, 245n10
fraud  36, 181
Freddie Mac (Federal Home Loan Mortgage Corporation)  174
Friede, G.  241n22
Friedman, Milton  9
Capitalism and Freedom  2–3, 233n2
‘Friedman doctrine’  5, 6, 8, 9, 28, 109, 131
defects  2, 19, 128
and original business forms  82–3
Frigerio, Marco  245n5
functional equivalence  176, 184, 185
Gandhi, Mahatma  84
General Motors  141, 142
Geniza, Cairo (collection of Jewish manuscript fragments)  71
Germany
evolution of corporation in  15
ownership  92, 95–6, 98, 99, 102–3
stock markets  95
United Kingdom contrasted  94, 95–6
Goldsmiths  79
Goodridge, Peter  234n2
Google  32, 33, 43, 91
Goshen, Zohar  88, 89, 238n10
governance see corporate governance
governmental purpose  8
Great Depression  97
Greenacre, Jonathan  245n9
Greenspan, Alan  113, 239n6
Grossman, Sandy  242n5
guilds  73–4, 81, 82
Guiso, L.  241n26
Halmi, N.  244n1
Hamdani, Assaf  88, 89, 238n10
Hamilton, Robert  243n13
Hammurabi, Code of  69
Handelsbanken (Swedish bank)  56, 192, 194, 195
Hansmann, Henry  244n20
happiness  6, 9, 11, 36
Hart, Marjolein’t  237n46
Hart, Oliver  242n5
Haskel, Jonathan  234n2
Hawking, Stephen  45
hedge funds  181
Helm, Dieter  246n1
Hershey  162
Hoffman, Reid  91
Holland, Bank of Amsterdam  80, 81–2 see also Netherlands, loan guarantee scheme
Holocaust  10–11
Hong, Harrison  240n17
hostile takeovers  126
Howard, Ebenezer  84
human capital  17, 20, 21, 41, 42, 49, 118, 124
accounting and performance  131, 134–6
decline in  135, 203, 224
Hunt, Edwin  237n47, 242n8
Huntington, Samuel  221, 247n1
‘hybrid value chains’  118
idiosyncratic value  128, 196, 223
ownership  89, 91, 92, 101, 103, 105
prospects  223, 231
Ikea  121–2
Inclusive Wealth Report (2012)  136, 137, 140
India
growth of  34
infrastructure  206
mobile money  178
individualism  11
industrial foundations  40–1, 43, 56, 121–2
influence periods  104
infrastructure see also investment
allocation between public and private sector  211
closure  219–20
competitive tendering  213
cost–benefit analysis  209
defining  206
features of programmes  209
interconnected-systems nature of  210
licences/licence conditions  213–14
not accounting for  210–11
nuclear power stations  208–9
old networks  208
partnerships  218–19
phases
build  216–17
design  215–16
operate  217–18
private-sector commitment  213–15
public commitment  211–13
recommendations for improving  207–8
sewerage systems  208, 209–10
technological advances  1–2, 208–9
transport  208, 209
underinvestment in  21–2, 27, 206–7
initial public offerings (IPOs)  95, 101
innovations/inventions  10, 14, 17, 18, 25, 170
institutional investors  120–1, 223
institutions
basing regulation on  24
social purpose of financial institutions  25
institutions of trust  93, 94, 99
intangibles  21, 31
integrity  14, 35, 54–7
and deception  54–5
defining  54
levels of  59–60
‘mintegrity’/’maxtegrity’  57, 164
and moral purpose  54
‘saintegrity’/’sintegrity’  13, 56, 59
intellectual capital  41, 42, 49, 124
interest payments  26
interlopers  77
investment  206–20 see also infrastructure
expenditure, cynicism concerning  207
and finance  27, 227
in intangibles  31
integrating with finance  203–4
intermediary investors  169
investment management  169–70
investor protection  15
long-term  120–2
management problems  206
underinvestment in infrastructure  21–2, 27, 206–7
Ioannidou, Vasso  246n13
Ioannou, Ioannis  240n16
Islam  68–70
Golden Age  68
mudaraba (business partnership)  68, 69, 71
isqa (Jewish business partnership)  69, 71
Japan
banks  96, 97, 114
business coordinators  96
corporate governance  114
evolution of corporation in  15
growth of  34
natural capital  137
ownership  92, 96–7, 98, 99
Tokyo Stock Exchange  102
zaibatsu (Japanese family firms)  96, 97, 99
Jensen, Michael  101, 239n24
John Lewis Partnership (JLP)  43, 56, 116
joint-stock corporations  35, 36, 74, 79
J.S. Fry and Sons, merger with Cadbury  86
Juncker, Jean-Claude  189
Juncker plan  206
Kacperczyk, Marcin  240n17
Kang, Jun-Koo  238n13, 241n24
Katelouzou, Dionysia  246n16
Kenya  177, 178
Khan, M.  241n23
Kick, Thomas  246n14
Kim, Jin-Mo  238n13
kindness  57–9
King’s Bench, Court of  77
Korea, growth of  34
Koum, Jan 31–2
Kraft, takeover of Cadbury (2010)  37, 38, 86
Krishan, M.  240n20
Kuhn, Johan  234n12
Kuran, Timur  236n19
Labib, Subhi  236n17
Labour, specialization of  35
Lavington, Frederick  95, 238n15
law, corporate see corporate law
Law, John  71
leadership, kindness in  57–9
legal personality  38, 81, 164
legislation
empowering  158
enabling  157, 158, 165, 200
enforcing  158
refraining  159
requiring  159
restoring  159
Levine, Ross  244n3, 246n17
Lieber, Alfred  236n22
limited liability partnerships  157
limited partnerships  75
Linkedin  33
liquidity transformation  173, 174–5
loan guarantee schemes  197–8
Lockheed Martin  151, 160, 161
London Stock Exchange (LSE)  101, 102, 126
Listing Rules  94
Low, B.  241n24
Macaulay Stewart  242n3
Maddison, Angus  236n21
Madoff, Bernie  181
madrasas (Islamic colleges)  70
Magnuson, P.  244n1
Mahoney, Paul  237n41
Maimonides  69
maintenance expenditures, natural capital  138–9
Maitland, Frederic  235n4, 236n12, 243n18
Mallat, Chibili  236n15
Malmendier, Uleikw  235n1
management
accountability to shareholders  36, 37, 154
aligning interests with shareholders, issue with  154, 155
conflicts of interest with shareholders  35
negligence and fraud of  36
protection of  39
separation from shareholders  39
managerial corporatism, US  112
market intermediaries  172, 173
market values  141
marketplace, compared to the corporation  35, 36, 37
marking to market  140
Mars, Forrest  86, 88, 89, 105, 106
Mars, Frank  86, 106
Mars Catalyst  119
Mars family/company  86, 90, 106, 117, 119 see also Wrigley (subsidiary of Mars)
Marshall, Alfred  35, 36, 39, 234n4
Mas, Ignacio  245n9
Massachusetts Bay Company, Charter  66
master–slave relationship  50
material capital  41, 42, 132
maturity transformation  174
Maua programme (Wrigley)  117–19
Mayer, Colin  233n7, 233n8, 233n9, 234n1, 235n4, 238n14, 238n18, 238n20, 239n25, 240n13, 241n1, 244n2, 244n5, 245n1, 245n7, 245n9, 246n1
Mayfield, Charlie  116
Means, Gardiner  87, 97, 105
measurement  19–20
mechanistic view of the firm  47–50
Medici bank  72
Merchant Adventurers  73, 74
micro-entrepreneurs  117
Middle East  70, 128 see also Islam
Midgley, Thomas  141–2
Mill, John  242n4
mindful corporation  12, 32, 33, 35, 38, 45, 49, 124, 203, 224
minority affirmative action  104–5
‘mintegrity’/’maxtegrity’  57, 164
misrepresentation  181
Mithas, S.  240n20
Miyajima, Hideaki  238n20
mobile money  177–8, 183
Modiano, R.  244n1
Modigliani and Miller theorem  204
monetarism  2
monetary instruments  80
Morgeson III, F.  240n20
MPesa  177, 178
mudaraba (Muslim business partnership)  68, 69, 71
Multilateral Investment Guarantee Agency (MIGA)  212, 217
multinational organizations  85
municipal corporations  65–6
Murray, James  237n47, 242n8
mutual funds  102, 174, 179, 180–1, 196
Nachemson-Edwall, Sophie  240n13
Nagel, Thomas  52
Mind and Cosmos  50–1, 235n3
NASDAQ stock market  32
National Trust  144–5
natural capital  20, 21, 41, 42, 118, 124
accounting for  130, 131, 132, 133, 134, 136
categories  139
decline in  135, 137, 203, 224
determination of maintenance expenditures  138–9
identification of deterioration  139–40
infrastructure  210, 211
protection of  127–8, 139
value of  137–8
Natural Capital Committee, UK  144, 145
natural income  135–7
natural selection  51, 52, 53, 55
negligence, management  36
neo-Darwinism  47
Netherlands, loan guarantee scheme  197–8 see also Holland, Bank of Amsterdam
neutrality principles  200, 227
New Earswick, England  105
NGOs (nongovernmental organizations)  118
nomination committees, election of directors  121, 122, 212
Norman Conquest  73
Northrop Grumman  151, 161
Novo Nordisk  121–2
Office of National Statistics, UK  137
Ongena, Steven  246n14
ownership  84–106
changing composition of share ownership, in listed companies  102
comparison of countries  98–100
concentration of  94, 96, 105, 199
and corporate governance  154–5
dispersion of  96–9, 103, 105, 128
and corporate governance  113, 115
and corporate law  164, 166
diversity  16, 225
economic conceptualization of corporate ownership  87
economic misconceptions  87–8
Germany  95–6
idiosyncratic value  89, 91, 92, 101
‘insider’ system  95
Japan  92, 96–7
long-term  39, 159, 163, 164, 196
minority affirmative action  104–5
‘outsider’ system  96
portfolio theory  100–1
separation from control  3, 4, 33–4, 38, 39, 81
shareholders as owners  3
short-term  159, 162–3
stock markets, decline of  101–3
structure  33
Sweden  121
transformation process  103–4
United Kingdom  91, 92–4
United States  97–8
Oxford Review of Economic Policy  25
Oxford University  66, 70
Page, Larry  32, 43, 91
‘pain points,’ ecosystems  118
Pareto improvement  21
partnerships  14, 18, 25
Babylonian  69
commenda  71, 73, 74, 81–2
compagnia (partnership of relatives)  71, 72, 82
corporations compared  49, 78–9
infrastructure  218–19
isqa (Jewish business partnership)  69, 71
limited  75
limited liability  157
mudaraba (Muslim business partnership)  68, 69, 71
origins  63–4
passive shareholder capitalism, US  112
peer-to-peer lending  171, 182, 183
pension schemes  179
Peruzzi (Italian super-company)  71, 72
philanthropy  6, 17, 43
Philippon, Thomas  244n7
philosophy  50
physical capital  132, 133
Pollock, Frederick  235n4
Polman, Paul  116
Polybius, Historiae  235n1
portfolio management  100–1, 120, 169
diversification  172–3
Poulsen, Thomas  234n12
Príncipe island, chocolate production  85
private sector  25
privatization  27
Privy Council  78
profits/profit maximization  128 see also ‘Friedman doctrine’; shareholder value, maximizing
and accounting  131–2
corporate purposes  8, 9, 109, 228
fair or fake profits  20–1, 133, 141, 142
measurement/mismeasurement of profits  19–20, 132, 133, 140, 224
National Trust  145
and unsustainability  132–3
property view of the firm  3, 133–4
prospects  221–32
public sector  21, 25, 136
Public Utilities Holding Companies Act (PUHCA), US (1935)  238n23
public–private corporations  215
purposes, corporate see corporate purposes
Quakers  40, 84, 85
realism view, of value  51, 52
realization periods  104
reciprocal kindness  58
Reckitt, James  84
Red Rock Café, Mountain View (California)  31–2
regulation  15, 24, 25, 26, 27, 42, 167–88
of banks  171, 225
disintermediation  169, 171–3, 183
failure, focus on  182–3, 184–5
finance  167–71
functional equivalence  176, 184, 185
mobile money  177–8, 183
neutrality principles  227
purpose  167–8
purposeful  178, 184, 185
regulated company, guilds  74
regulating on purpose  183–5
risk management  179–83
shadow banking  173–7, 183
unregulated firms  44, 165
Regulation Q, US  171
relationships  47–50
renewables  138
repurchase agreements  175
res universitatis (corporate property)  64
Resor, Felicia  243n12
risk committees  192–4, 195
risk management  178, 179–83
Anglo-American systems  179, 180
central management  193
Continental Europe  179, 180
idiosyncratic risk  172
risk-spreading  175
Rock, Edward  243n17
Roll, Kate  240n11
Roman Catholicism  66, 67, 68
Roman period  28, 63–8
Roman Empire  65, 66
Roossinck, Marilyn  235n2
Rowntree, Joseph  84, 105
Rowntree, Seebohm
Poverty  84
Rowntree Foundation  105
rules of the game  8, 167, 228
Runciman, David  236n13
Ruskin, John  84, 237n2
Russia Company  74, 78
Ryan, Magnus  236n13
S&P index  33
Sadun, R.  241n27
Safaricom  177
‘saintegrity’/’sintegrity’  13, 56, 59
Salaman, Graeme  116, 240n9
São Tomé island, chocolate production  85
Sapienza, P.  241n26
scandals, financial  24
scarcity  18, 19
Schmitthoff, Clive  236n25
Schopenhauer, Arthur  40, 234n11
Scott, William  236n24
Securities Act 1933, US  98
Securities and Exchange Act 1934, US  98
Securities and Exchange Commission (SEC)  97
securitization  38, 174
self-awareness  51
self-interest/selfishness
and corporate purpose  16, 44
and governance  111, 115
and integrity  57
mutual  58
and ownership  87, 105
profit-seeking see profits/profit maximization
and regulation  168
and values  47, 48, 57, 58, 59
self-regarding commitments  152, 155, 159, 163
Serafeim, George  240n16, 241n23
Servaes, Henri  240n15
settlement in trust  43
shadow banking  24, 25, 183 see also banks; finance
credit transformation  173, 174
intermediation process  175
key components  177
liabilities  174
liquidity transformation  173, 174–5
maturity transformation  173, 174
origins  174
purpose  174–5
regulation  173–7
vs. standard banks  170
supposed advantages  175
Shakespeare, William  123, 189
shareholder value, maximizing  2–3, 5–7, 19, 129, 155, 222, 231
and corporate purpose  2, 3, 39, 42, 110–16
limitations of, as objective  113–15, 123, 125, 128
shareholders  4, 18, 60, 75, 95
accountability to  36, 37, 154
activism  87, 111, 112
aligning interests with management, issue with  154, 155
anchor  103, 128, 199
block holders  90, 98–100, 112, 196, 199, 223
conceptualization of corporation as shareholder-motivated entity  12–13
conflicts of interest with management  35
corporation perceived as just an instrument of  38
and creditors  193
and directors  111
enhancing value of see shareholder value, maximizing
Handelsbanken (Swedish bank)  192
information provided to  154–5
minority protection  199
as owners of the firm  3
as pipers calling corporate tune  202, 203
powers  38
primacy  111, 121
prioritization of interests  23
rights  4, 36, 37, 38, 75, 105
strengthening  198–9
separation from management  39
‘wolf packs’ (activist shareholder groups)  112
Shiller, Robert
Phishing for Phools  55, 115, 235n7, 240n8
Siedentop, Larry  235n9, 247n2
Siems, Mathias  246n16
Silicon Valley  18
Singapore, growth of  34
Slote, Michael  242n6
small and medium sized businesses (SMEs)  3–4, 93, 196
failure of British banks to support  191, 193, 195
Smart, John  235n6
Smith, Adam  35, 36, 37, 39, 79
Theory of Moral Sentiments  45, 234n14
Wealth of Nations  45, 234n3, 234n14, 237n43, 237n44
social capital  20, 21, 41, 42, 118, 124
accounting and performance  131, 133–6, 140
decline in  203, 224
social commitments  153
social compact  27
social media companies  32–3
social networking organizations  18
social welfare  84
societas  63–4, 73, 74
societas publicanorum  64, 65, 69, 70, 81, 82
sovereign banking crisis 2011  189–90
specialization of labour  35
spiritual capital  123
Staplers (guild)  73
Stern, Philip  75, 236n27
stock corporations  79, 81–2
stock exchanges  80, 82
stock markets  7, 16, 33
decline of  101–3
Germany  95
growth of  98–9
Japan  96
NASDAQ  32
ownership  90
stock market crash (1929)  97
ultimate purpose  103
United Kingdom  91, 93–4, 99, 179, 203
United States  91, 98, 179, 203
Storey, John  116, 240n9
Stout, Lynn  242n7
Strine, Leo  111–12, 239n1, 239n4
Stulz, R.  239n7
subjective determination, of value  51, 52–3
subprime mortgages  175
super-companies (Italian)  71–2
survival of the fittest  47
sustainability  132–3, 159–60
sweatshops  37, 38
Sweden, share ownership pattern  121
symbiogenesis  48, 49, 70
symbiosis
biological perspective  13, 46–7, 48, 49, 54
evolution of corporation  70, 82
System of Environmental-Economic Accounting (SEEA)  136
takeovers  126, 128, 140
Tamayo, Ane  240n15
Tata  162
Tax Cuts and Jobs Act 2017, US  246n15
taxation  26, 76–7, 197–8, 226, 227
Taylor, Gabriele  235n5
technological advances  1–2, 208–9
Thatcher, Margaret  64
Thomsen, Steen  234n12, 244n20
Tokyo Stock Exchange  102
trade credit  191
tragedy of the commons  127
transnational corporations  33, 34, 40, 41, 43
trustees, board of  161–2
trustworthiness  15, 18, 19, 22, 39, 163, 224
and commitment  154
erosion of trust in business  1, 44
and ownership  90
restoring of trust in business  44–5
trusted corporation  40–4, 53
variations in levels of trust  165
Twain, Mark  46
UBS  120
Udovitch, Abraham  236n18
underinvestment in infrastructure  21–2, 27
UNESCO Inclusive Wealth Report  10
Unilever  117, 119, 201
aborted acquisition by Kraft  116
United Kingdom  15
Bank of England  93, 191
banks  81, 92–3, 94
failure to support SMEs  191, 193, 195
‘Big Bang’  25, 244n8
British common law  43
Companies Act 1948  94
Companies Act 2006  110, 111, 113, 157, 200–1
‘comply or explain’ governance principle  114
Corporate Governance Code  113
deregulation, associated with ‘Big Bang’  25
directors, election of  121
dual-class share structures not permitted in  91, 92, 125
English Law  65
family ownership, erosion of  85–6, 90, 94, 98, 99
Germany contrasted  94, 95–6
‘Glorious Revolution’ (1688), England  77
guilds, England  73–4, 81, 82
industrial revolution  202
investment in intangibles  31
King’s Bench, Court of  77
listing rules of stock market  91
London Stock Exchange (LSE)  94, 101, 102, 126
National Trust  144–5
Natural Capital Committee  144, 145
Office of National Statistics  137
ownership  85, 90, 91, 93–6, 98, 101, 102, 104, 105
private ownership  103
sewerage systems  209–10
stock markets  91, 93–4, 99, 101, 103, 179, 203
takeovers  128
United States contrasted  91, 92, 200
Wimpole Hall Farm, Cambridgeshire (UK)  144–5
United States
banks  168–9, 171, 174
benefit corporations  42–3
business groups  98, 99, 238n22
corporate governance  112
dotcom bubble, bursting of  113, 114
dual-class share structures  91, 92, 98
evolution of corporation in  15
Fannie Mae and Freddie Mac  174
infrastructure  206
investment in intangibles  31
managerial corporatism  112
ownership  91, 92, 97–8, 99, 101–5
private ownership  103
Public Utilities Holding Companies Act (PUHCA), 1935  239n23
Regulation Q  171
Securities Act 1933  98
Securities and Exchange Act 1934  98
Securities and Exchange Commission (SEC)  97
stock markets  91, 98, 101, 103, 179, 203
Tax Cuts and Jobs Act 2017  246n15
United Kingdom contrasted  91, 92, 200
‘uplifters’ (micro-entrepreneurs)  117
utilities  7, 42–3, 184, 213, 218, 239n23
and infrastructure  27, 211, 227
Valeant Pharmaceuticals  112
values  13, 20, 46–60
articulation of  159
biological perspective  13, 46–8, 49, 53
corporate consciousness  13, 47, 50–4, 60
determination of value  51, 52–3
of firm  141
implications  59–60
increasing value  52
intangible  49
integrity  13, 14, 35, 54–7
kindness  57–9
market  141
and purpose  109–10
relationships  47–50
Van Reenen, I.  241n27
Vanguard  120
venture capital  195
virtue
and integrity  54, 55
kindness  57, 59
virtuous cycle  59
Vodafone  177
Wachter, Michael  243n17
Wagner, Hannes  238n18, 239n25
Wallis, Gavin  234n2
waqf (unincorporated trust)  69–70
Warren, Alvin  246n12
wealth disparities  33, 34, 44
well-being, deriving  11, 12
West Africa, chocolate production  85
Whanganu River, New Zealand  127–8
WhatsApp  32
Wilde, Oscar  140
William the Conqueror  66
Williams, Bernard  54, 57, 235n6
Williston, Samuel  236n26
Wimpole Hall Farm, Cambridgeshire (UK)  144–5
‘wolf packs’ (activist shareholder groups)  112
World Bank  212, 217
Worthington, Sarah  243n11
Wrigley (subsidiary of Mars)  86, 240n11 see also Mars family/company
Maua programme (Nairobi)  117–19
Wunsch, Cornelia  236n16
Yerramilli, V.  246n9
Yoon, A.  241n23
YouTube ‘kindness boomerang’ video  58
zaibatsu (Japanese family firms)  96, 97, 99
Zingales, L.  241n26
Zuckerberg, Mark  31–2, 43