The History of Corporate Governance in the United Kingdom and Its Evolution
Corporate governance in the United Kingdom has a long and dynamic history that reflects changing economic, legal and societal expectations about how companies should be directed and controlled. Although often associated with contemporary debates about board structures and executive accountability, its roots stretch back several centuries to the rise of joint stock enterprise. Early chartered trading companies such as the British East India Company demonstrated for the first time the particular governance challenges posed when ownership is widespread and control is exercised by managers rather than by investors themselves. These enterprises highlighted the enduring challenge of ensuring that directors’ actions align with shareholder interests, a difficulty that remains central to modern governance discourse. The nineteenth century ushered in transformative legal reforms that laid the foundations of the modern corporate economy. The Joint Stock Companies Act 1844 enabled incorporati...
