Summary and concluding observations

In 1622, disgruntled shareholders of the Dutch East India Company (Vereenigde Oost-Indische Compagnie or VOC) complained that their interests had been harmed, as the directors had entered into expensive warfare against the Spaniards. The States General had instructed the VOC directors to chase away the Spaniards from the East. The semi-public nature of the VOC was an important conflict of interest between shareholders and the VOC. More than two centuries later, holders of bearer shares of the Dutch Trade Association (Nederlandsche Handel-Maatschappij, or NHM), one of the predecessors of ABN AMRO, took legal action against the NHM, which had deprived them of their dividend rights without their consent. By the end of the 19 century, shareholders of Royal Dutch – which later merged with Shell – protested when Royal Dutch tried to prevent an unfriendly takeover by Standard Oil. Royal Dutch issued a new class of shares to insiders, who had the right of a binding nomination for the appointment of directors. In 2007, activist hedge funds forced a split up of Stork against the will of the board and many shareholders. Conflicts between shareholders and the company are an inherent feature of company law. They do not only arise in case of mismanagement by the directors. Conflicts of interest between individual shareholders and the company or fellow shareholders also serve as an important source of shareholder revolts. These conflicts give rise to questions which are at the heart of company law: what is the relation between a shareholder and the company? What duties does a director owe his shareholders? How should the interest of the company be defined? Do directors need to take into account other interests than the company’s interest? Are shareholders well suited to prevent mismanagement by directors? May shareholders act solely in their own interest, or do they need to take into account the interests of others? This study addresses these questions from a historical perspective. It not only tries to find answers under current company law, but it also aims at deepening our insight into the evolution of company law, particularly with respect to the balance of power within companies. The focus is on Dutch law, but the argument is embedded in a broad international context, taking into account influences from other legal traditions, including the UK, the US, Germany and France. Two legal forms, originating from Roman law, play an important role in this book: societas (partnership) and universitas (corporation). Both have historically influenced the development of company law. But they are also used as a metaphor for conflicts of interest between individual shareholders and the collective interest. The Roman societas attached great importance to the