DOCSLIB.ORG

The South African Connection: Western Investment in Apartheid

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The South African Connection: Western Investment in Apartheid The South African connection: western investment in apartheid http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.crp2b20025 Use of the Aluka digital library is subject to Aluka’s Terms and Conditions, available at http://www.aluka.org/page/about/termsConditions.jsp. By using Aluka, you agree that you have read and will abide by the Terms and Conditions. Among other things, the Terms and Conditions provide that the content in the Aluka digital library is only for personal, non-commercial use by authorized users of Aluka in connection with research, scholarship, and education. The content in the Aluka digital library is subject to copyright, with the exception of certain governmental works and very old materials that may be in the public domain under applicable law. Permission must be sought from Aluka and/or the applicable copyright holder in connection with any duplication or distribution of these materials where required by applicable law. Aluka is a not-for-profit initiative dedicated to creating and preserving a digital archive of materials about and from the developing world. For more information about Aluka, please see http://www.aluka.org The South African connection: western investment in apartheid Author/Creator First, Ruth; Steele, Jonathan; Gurney, Christabel Publisher Maurice Temple Smith, Ltd. (London) Date 1972 Resource type Books Language English Subject Coverage (spatial) South Africa, United Kingdom Coverage (temporal) 1960 - 1970 Source Northwestern University Libraries, Melville J. Herskovits Library of African Studies, 332.673 F527s Rights By kind permission of Christabel Gurney, Gillian Slovo, and Jonathan Steele. Description This book focuses primarily on the involvement of British companies in South Africa, reviewing their involvement with apartheid, changes in the economics of the apartheid system, and more generally the role of foreign capital in South Africa. It contains case studies of nine companies, as well as additional discussion of the involvement of other countries, including the United States, France, West Germany, and Japan. Format extent 358 page(s) (length/size) http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.crp2b20025 http://www.aluka.org NORTHWESTERN UNIVERSITY LIBRARY EVANSTON, ILLINOIS The South African Connection RUTH FIRST JONATHAN STEELE CHRISTABEL GURNEY The South African Connection Western Investment in Apartheid TEMPLE SMITH - LONDON First published in Great Britain 1972 by Maurice Temple Smith Ltd 37 Great Russell Street, London wci © 1972 RUTH FIRST, JONATHAN STEELE &CHRISTABEL GURNEY ISBN 0 8511 7029 3 Printed in Great Britain by Billing & Sons Limited, Guildford and London 33 ;.73 F57s Contents I Business and Politics: How They Mix 9 2 The Foundations of the Partnership 23 ,3 The Black Poor Get Poorer 41 '4 The Floating Colour Bar 59 Less pay for equal work 66 Job dilution 71 The border areas 77 5 The Place of Foreign Capital 81 Mining: the magnet for them all 85 Banking and insurance: fund-raisers for apartheid 89 The motor industry: in gear with the Government 95 Textiles: the benefits of cheap labour 98 Chemicals: the giant that needs a market ioI Oil: the Achilles heel 103 Computers: the most advanced sector of them all Io6 6 The Patterns of the Past lo9 7 South Africa's Other Friends 128 The United States 128 France 135 West Germany 137 Japan 142 8 The Companies: Image and Reality 147 NINE CASE STUDIES The Rio Tinto--Zinc Corporation 162 British Leyland 167 Imperial Chemical Industries 172 British Steel Corporation 176 Dunlop Holdings 179 Guest Keen and Nettlefolds 182 General Electric Company i86 General Motors x89 Caltex '9' 9 Experiments and Failures 193 Polaroid 193 Barclays Bank: equal pay for equal work? 200 The Oppenheimer phenomenon 203 io Business Plays Politics 213 The United Kingdom-South Africa Trade Association 216 The South Africa Foundation 221 The British National Export Council 233 The Monday Club 239 i i Recruiting Immigrants for South Africa 243 1 2 Western Trade Follows the South African Flag 255 13 Conclusion 279 Chapter Notes 298 Appendices 316 Tables 330 Index 341 Acknowledgements We have learnt much from others working on the political economy of apartheid, and this will be clear from our detailed references to sources. In particular we should like to thank: Denis Herbstein whose on-the-spot interviews with industrialists in South Africa were invaluable, and who generously made available to us his unpublished notes; Sean Gervasi who helped with statistics and tables and by placing at our disposal his notes on research in progress; Harold Wolpe, Vella Pillay and Brian Bunting who read and criticized some of the draft chapters and who helped to clarify our ideas in discussion; Peter Kellner who was involved in the early stages of the book; Paul Fauvet who did some of the research on company directorships; Timothy Smith, Reed Kramer and Tammie Hultman, who made available the material they have collected on the operations of American corporations in South Africa. Note on exchange rate conversions In most cases we have converted rands into pounds sterling at the current rate of R .95 = kI. Where figures refer to capital flows (which are to some extent influenced by the prevailing rate of exchange at the time) we have converted at the rate: R2 = ki up to and including 1967 Ri.7 = ki for 1968 to 1971 Ri.95 = Ci for 1972 onwards The 1967 devaluation of the pound occurred in November. We have, however, taken the rate R2 = Ci for the whole of the year 1967. The 1971 devaluation of the rand occurred in December. Again we have taken the rate Ri .7 for the whole of the year 1971. Similarly we have used the following dollar exchange rates: US $2.80 = £i up to and including 1967 US $2.40 = Ci for 1968 to 1971 US $2.55 = i for 1972 onwards 1 Business and Politics: How They Mix From a Conservative point of view, it was Reginald Maudling who hit the nail firmly on the thumb. In May 197o he launched into an attack on the demonstrators who were trying to prevent the all-white South African cricket tour. They were, he argued, putting too much emphasis on one, relatively minor, aspect of South African life. 'South African trade and industry', the Conservative deputy leader intoned, %are just as much based on apartheid as cricket is.' What Mr Maudling was trying to do, of course, was to de-fuse the protests with the old formula of 'Why pick on... ?' (cricket, South Africa, Greece, Vietnam, or whatever the case may be). But inadvertently he had hit on an important truth; for in spite of all the action by militant radicals against apartheid, it is only recently that big business corporations have come under direct attack. Demonstrators have nearly always taken political institutions as the objects of their opposition, with foreign .embassies the favourite targets. It is surely time to question this approach as a preoccupation with the outward symbols of political power and a lopsided scale of tactical priorities. This question is probably more important in the discussion of apartheid than of any other world issue. For, controversial though the British Government's policy towards South Africa is, its influence is small compared with the effect of trade and industry. Gettin on for two-thirds of all foreign investment in South Africa is British. and- one-third _f all South Africa's exports come to this country. British business interests spra thrug almost every aspect otie ubli's life; it is lia- ,to-img- e-hWs-o--e---ecors, liekl75hnking, for example, would keep going without British backing. The South African Connection In their reply to the suggestion that this involvement puts a special onus on British firms to help to end apartheid, businessmen generally give one of two answers: the first is that business and politics (like sport and politics) should not be mixed, and the second that apartheid may be objectionable, but that business is 'doing its bit behind the scenes' to change it; the alternative to this reform-by-participation would, after all, be to try to bring down South Africa's regime and consequently her economy. So, let us opt for reform through business rather than for revolution. ('e view that business and politics should not be mixed is extraordinarily difficult to uphold; it rests on the argument - a singularly unpersuasive one - that politics and business are autonomous areas of society, and it ignores the widespread and permanent pressure exerted upon governments by those who control industrial, commercial and financial resource Business and political interests, far from being separate and independent, interact closely with each other, influence each other and each of them relies on this interdependence in its own policy-making. Manifestly, companies use their influence where they can to further their own interests in both the short and the long term. Sometimes this influence takes the form of special pleading - for instance, the Rolls-Royce appeal to the British Government for a forty-two-million pound subsidy to help the company over short-term difficulties during the design and production of aero-engines for the American market. But the influence is often directed towards more general ends: changes in company taxation; alterations in trade policy; even - as could be seen from the dramatic rise in share prices on 19 June I97o, at the time of Britain's general election - a change of government. The argument that business and politics should not be mixed comes up against insuperable difficulties in South Africa. The history of the development of the country's economy falls into three main stages: the coercion of black Business and Politics: How they Mix labour into the compounds of the gold and diamond mines; Britain's establishment of Union in I9IO so that centralized state power would control labour in the interests of white capital; and now the stage of apartheid, when the political and economic pressures for cheap labour are intensified; all three tell of the close interdependence of vested political and business interests.
Load more

Recommended publications
  • The Political Thought of Harry Oppenheimer, Under the Editorship of Kalim Rajab
    THE JOURNAL OF THE HELEN SUZMAN FOUNDATION | ISSUE 81 | DECEMBER 2017 BOOK REVIEW Gary Ralfe retired from active business life in 2006 after forty A Man Of Africa : The Political years of service firstly with Anglo American Corporation, and then Thought of Harry Oppenheimer with De Beers where he was Managing Director for eight Edited by Kalim Rajab years. In addition to My forty-year career with Anglo American and De Beers developed the HSF he chairs the Board of Governors under the benign shadow of Harry Oppenheimer (HFO). To generations of Michaelhouse, the of managers and staff in what used to be called the greater group HFO fund-raising arm of the Alexandra Education was more than a chairman and leader. He was a living icon. I was Committee, the fund- not the first or the last young man or woman to join Anglo American raising arm of Business Against Crime and the because it was a force for good in Southern Africa, the most important Beyond Foundation engine of economic growth, industrialisation, urbanization and a which does community work in rural areas. better life for all. I associated with the credo attributed to HFO’s father Sir Ernest Oppenheimer that “the purpose of large corporations such as Anglo American is to make profits for its shareholders, but to do so in such a way as to make a real and lasting contribution to the welfare of the communities where it operates”. It is surprising that seventeen years after HFO’s death there is still no biography. I know that the family wisely wanted time to elapse before commissioning one.
    [Show full text]
  • The Diamond Cartel
    THE DIAMOND CARTEL Although the United States is the principal consumer of the world's dia- mond supply,' the diamond industry is so cartelized as to be virtually imper- vious to pressure by American users of diamonds. Within the past ten years industrial diamonds have become indispensable to various high-speed, pre- cision manufacturing operations.2 Since distribution of ninety-five percent of the world's diamond production is channelized through a single marketing combine, competitive forces within the industry have been short circuited.a Therefore consumer resistance has been impracticable and American efforts to obtain a better bargaining position have so far been ineffective. The cartel is completely foreign-controlled and operates entirely outside the United States,4 thus obviating effective action under the antitrust laws and making 1. Leslie, Diamonds as Tools Speed up Victory, DoMEsTIc CoxriRcE, Aug. 1945, p, 28. Today, the United States uses approximately 90% of the world's production of Indus- trial diamonds. § 29 Complaint, DeBeers Consolidated Mines Ltd. v. United States, 325 U.S. 212 (1945) [hereinafter referred to as Complaint]. This figure includes all cate- gories of industrial diamonds--ballas, boart and carbonado. For a description of the types of industrial diamonds, see Diamonds for Victory, FOREIGN COMMERCE, Jan. 17, 1942, p. 4; Industrial Diamonds,.FORTUNE, June 1935, p. 22. Carbonado is rare and almost entirely confined to Brazil and will not enter into the discussion hereafter. Post-war production should produce the following ratios of diamond types: out of every 10,000 carats 250 will be carbonado, 1,900 ballas, 1,975 gemstones, and 5,875 boart.
    [Show full text]
  • Truth and Reconciliation Commission of South Africa Report: Volume 2
    VOLUME TWO Truth and Reconciliation Commission of South Africa Report The report of the Truth and Reconciliation Commission was presented to President Nelson Mandela on 29 October 1998. Archbishop Desmond Tutu Ms Hlengiwe Mkhize Chairperson Dr Alex Boraine Mr Dumisa Ntsebeza Vice-Chairperson Ms Mary Burton Dr Wendy Orr Revd Bongani Finca Adv Denzil Potgieter Ms Sisi Khampepe Dr Fazel Randera Mr Richard Lyster Ms Yasmin Sooka Mr Wynand Malan* Ms Glenda Wildschut Dr Khoza Mgojo * Subject to minority position. See volume 5. Chief Executive Officer: Dr Biki Minyuku I CONTENTS Chapter 1 Chapter 6 National Overview .......................................... 1 Special Investigation The Death of President Samora Machel ................................................ 488 Chapter 2 The State outside Special Investigation South Africa (1960-1990).......................... 42 Helderberg Crash ........................................... 497 Special Investigation Chemical and Biological Warfare........ 504 Chapter 3 The State inside South Africa (1960-1990).......................... 165 Special Investigation Appendix: State Security Forces: Directory Secret State Funding................................... 518 of Organisations and Structures........................ 313 Special Investigation Exhumations....................................................... 537 Chapter 4 The Liberation Movements from 1960 to 1990 ..................................................... 325 Special Investigation Appendix: Organisational structures and The Mandela United
    [Show full text]
  • Annual Report 2007 08 Index
    ANNUAL REPORT 2007 08 INDEX VISION & MISSION 2 PRESIDENT’S REPORT 4 CEO REPORT 6 AMATEUR CRICKET 12 WOMEN’S CRICKET 16 COACHING & HIGH PERFORMANCE 18 DOMESTIC PROFESSIONAL CRICKET 22 DOMESTIC CRICKET STATS 24 PROTEAS’ REPORT 26 SA INTERNATIONAL MILESTONES 28 2008 MUTUAL & FEDERAL SA CRICKET AWARDS 30 COMMERCIAL & MARKETING 32 CRICKET OPERATIONS 36 CORPORATE GOVERNANCE REPORT 40 GENERAL COUNCIL 42 BOARD OF DIRECTORS 43 TREASURER’S REPORT 44 FINANCIAL STATEMENTS CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 46 UNITED CRICKET BOARD OF SOUTH AFRICA 62 CRICKET SOUTH AFRICA (PROPRIETARY) LIMITED 78 1 VISION & MISSION VISION Cricket South Africa’s vision is to make cricket a truly national sport of winners. This has two elements to it: • To ensure that cricket is supported by the majority of South Africans, and available to all who want to play it • To pursue excellence at all levels of the game MISSION As the governing body of cricket in South Africa, Cricket South Africa will be lead by: • Promoting and protecting the game and its unique spirit in the context of a democratic South Africa. • Basing our activities on fairness, which includes inclusivity and non-discrimination • Accepting South Africa’s diversity as a strength • Delivering outstanding, memorable events • Providing excellent service to Affiliates, Associates and Stakeholders • Optimising commercials rights and properties on behalf of its Affiliates and Associates • Implementing good governance based on King 2, and matching diligence, honesty and transparency to all our activities CODE
    [Show full text]
  • In This Issue
    2016/2017 ISSUE 3 Message from Border Cricket CEO Spring is upon us and the cricketers are working hard at training attendance and contributions at such meetings. and adding to the noise levels down the corridor which was The Border Team under the guidance of Coach Frank Plaatjes and somewhat quieter during the winter period. I take this opportunity captain Martin Walters are ready for a bumper season. We have to welcome you to the start of the 2016/17 season. confidence that their results will improve from last season and we can again compete in the finals of the one-day competition, as we The team prepared well for the Africa T20 Cup. We were all geared are well known for our performances in the limited up for a great competition, however the weather Gods were not on over competition. our side. We will work to ensure that the lucky draw will soon be a distant memory. Our Border team performed exceptionally well Our Women’s team performed so well last season and we have and we look forward their campaigns this season. The rain factor every confidence yet again that they will bring back the silverware however is uncontrollable and we hope that it will not hamper too and set new milestones. many of our cricket matches this season. We are busy updating our website and will soon have all our Off the field we received an unqualified audit during this season updated programmes, fixtures and courses for the season. with a profit of R 3.1 million, our revenue jumping to R38 million.
    [Show full text]
  • CSA Schools T20 Challenge 2 Pretoria | 6-8 March 2020 Messages
    Messages Previous Winners Umpires Emergency Contacts Daily Programme Fixtures NATIONAL CRICKET WEEK POOL A | Team Lists POOL B | Team Lists Playing Conditions CSA SCHOOLS T20 Procedure for the Super Over T20 CHALLENGE Appendix 1 Pretoria | 6-8 March 2020 Appendix 2 Schools Code of Conduct Messages Chris Nenzani | President, Cricket South Africa Previous Winners Umpires The Schools’ T20 tournament CSA values our investment in youth extremely highly. It is is not just the biggest event an important contribution to nation building through cultural Emergency Contacts that Cricket South Africa (CSA) diversity which has become one of the pillars on which our has ever handled but it creates cricket is built. CSA has travelled a wonderful journey over the Daily Programme a pathway of opportunity for past 29 years of unity and everybody can be proud of his or her schools at all levels to live their contribution. dreams. Fixtures There are countless cricketers who have gone on from our It takes the game to every corner youth programs to engrave their names with distinction in South of the country and to established African cricket history and we congratulate them and thank them POOL A | Team Lists cricket schools as well as those that are just starting to make for their contributions. their way. As such it is a key component of our development POOL B | Team Lists program and of our vision and commitment to take the game to I must also put on record our thanks to all the people who have given up their time without reward to coach and mentor our all.
    [Show full text]
  • Directory of Organisations and Resources for People with Disabilities in South Africa
    DISABILITY ALL SORTS A DIRECTORY OF ORGANISATIONS AND RESOURCES FOR PEOPLE WITH DISABILITIES IN SOUTH AFRICA University of South Africa CONTENTS FOREWORD ADVOCACY — ALL DISABILITIES ADVOCACY — DISABILITY-SPECIFIC ACCOMMODATION (SUGGESTIONS FOR WORK AND EDUCATION) AIRLINES THAT ACCOMMODATE WHEELCHAIRS ARTS ASSISTANCE AND THERAPY DOGS ASSISTIVE DEVICES FOR HIRE ASSISTIVE DEVICES FOR PURCHASE ASSISTIVE DEVICES — MAIL ORDER ASSISTIVE DEVICES — REPAIRS ASSISTIVE DEVICES — RESOURCE AND INFORMATION CENTRE BACK SUPPORT BOOKS, DISABILITY GUIDES AND INFORMATION RESOURCES BRAILLE AND AUDIO PRODUCTION BREATHING SUPPORT BUILDING OF RAMPS BURSARIES CAREGIVERS AND NURSES CAREGIVERS AND NURSES — EASTERN CAPE CAREGIVERS AND NURSES — FREE STATE CAREGIVERS AND NURSES — GAUTENG CAREGIVERS AND NURSES — KWAZULU-NATAL CAREGIVERS AND NURSES — LIMPOPO CAREGIVERS AND NURSES — MPUMALANGA CAREGIVERS AND NURSES — NORTHERN CAPE CAREGIVERS AND NURSES — NORTH WEST CAREGIVERS AND NURSES — WESTERN CAPE CHARITY/GIFT SHOPS COMMUNITY SERVICE ORGANISATIONS COMPENSATION FOR WORKPLACE INJURIES COMPLEMENTARY THERAPIES CONVERSION OF VEHICLES COUNSELLING CRÈCHES DAY CARE CENTRES — EASTERN CAPE DAY CARE CENTRES — FREE STATE 1 DAY CARE CENTRES — GAUTENG DAY CARE CENTRES — KWAZULU-NATAL DAY CARE CENTRES — LIMPOPO DAY CARE CENTRES — MPUMALANGA DAY CARE CENTRES — WESTERN CAPE DISABILITY EQUITY CONSULTANTS DISABILITY MAGAZINES AND NEWSLETTERS DISABILITY MANAGEMENT DISABILITY SENSITISATION PROJECTS DISABILITY STUDIES DRIVING SCHOOLS E-LEARNING END-OF-LIFE DETERMINATION ENTREPRENEURIAL
    [Show full text]
  • Walter Runciman and the Decline of the Liberal Party
    WaltER RUNCIMAN AND thE DECliNE of thE LIBERal PARTY Historians remain divided about the contribution that biography can make to their craft. Those who believe that the study of individuals is important because the decisions of those individuals affect the course of events and that the replacement of one key player in the historical mosaic can significantly change the way in which history evolves are matched by others who argue that biography inevitably exaggerates the role and significance of the individual and distorts the reality of the historical narrative. By David Dutton.1 26 Journal of Liberal History 84 Autumn 2014 WaltER RUNCIMAN AND thE DECliNE of thE LIBERal PARTY etween someone like parliament alongside his own father seafaring family. Two of his great- Thomas Carlyle, who and even of having preceded him grandfathers fought as midshipmen Bwrote that ‘history is the there. A governmental colleague at Trafalgar, while his father, also essence of innumerable biogra- offered a very fair assessment of him called Walter, rose from humble phies’, and the committed Marxist in 1912. ‘Runciman,’ he wrote, ‘is beginnings to own a major ship- who views the individual as a help- able, honest, hard-working, coura- ping company in the north-east. less cork bobbing up and down on geous, but while a good speaker, The traditional Liberal commit- the remorseless tides of economic just lacks that touch of genius which ment to free trade was part of the determinism, there can be no meet- Churchill has got, and that charm young Walter’s thinking as a pros- ing of minds.2 But somewhere which Lloyd George abounds in.
    [Show full text]
  • Report of the Special Committee Against Apartheid, Supplement No
    Report of the Special Committee Against Apartheid, Supplement No. 22 (A/9622) http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.scaa1974001 Use of the Aluka digital library is subject to Aluka’s Terms and Conditions, available at http://www.aluka.org/page/about/termsConditions.jsp. By using Aluka, you agree that you have read and will abide by the Terms and Conditions. Among other things, the Terms and Conditions provide that the content in the Aluka digital library is only for personal, non-commercial use by authorized users of Aluka in connection with research, scholarship, and education. The content in the Aluka digital library is subject to copyright, with the exception of certain governmental works and very old materials that may be in the public domain under applicable law. Permission must be sought from Aluka and/or the applicable copyright holder in connection with any duplication or distribution of these materials where required by applicable law. Aluka is a not-for-profit initiative dedicated to creating and preserving a digital archive of materials about and from the developing world. For more information about Aluka, please see http://www.aluka.org Report of the Special Committee Against Apartheid, Supplement No. 22 (A/9622) Alternative title Report of the Special Committee Against ApartheidA/9622S/11522 Author/Creator Special Committee against Apartheid Publisher United Nations, General Assembly (New York) Date 1974-09-27 Resource type Reports Language English Subject Coverage (spatial) South Africa Description LETTER OF TRANSMITTAL. INTRODUCTION. I. REVIEW OF THE WORK OF THE SPECIAL COMMITTEE: A. Action taken by the General Assembly at its twenty-eighth session; B.
    [Show full text]
  • Growth and Transition in the Cleveland Iron and Steel Industry, 1850 to 1914
    Durham E-Theses Growth and Transition in the Cleveland Iron and Steel Industry, 1850 to 1914. JAMES, STEPHEN How to cite: JAMES, STEPHEN (2013) Growth and Transition in the Cleveland Iron and Steel Industry, 1850 to 1914., Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/6957/ Use policy The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in Durham E-Theses • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult the full Durham E-Theses policy for further details. Academic Support Oce, Durham University, University Oce, Old Elvet, Durham DH1 3HP e-mail: [email protected] Tel: +44 0191 334 6107 http://etheses.dur.ac.uk Growth and Transition in the Cleveland Iron and Steel Industry, 1850 to 1914. Stephen James Abstract The dramatic expansion of the iron industry in Cleveland from 1850 propelled the district briefly to the position of the world’s largest iron-producing centre and brought about the formation of a major industrial cluster in a previously unindustrialised area. By the end of the 1870s, however, its prosperity was threatened by developments in steel-production technology and the growth of iron and steel output in the US and Germany.
    [Show full text]
  • CONSTRUCTION CONTRACTS Law and Practice
    CONSTRUCTION CONTRACTS Law and Practice CONSTRUCTION CONTRACTS Law and Practice Richard Wilmot-Smith Joint Head of Chambers, 39 Essex Court; Recorder; One of Her Majesty’s Counsel; Bencher Middle Temple 1 3 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York © Oxford University Press, 2006 The moral rights of the author have been asserted Database right Oxford University Press (maker) Crown copyright material is reproduced under Class Licence Number C01P0000148 with the permission of OPSI and the Queen’s Printer for Scotland First published 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging-in-Publication Data Wilmot-Smith, Richard.
    [Show full text]
  • Corporate Boards and Incentives: Empirical Evidence from the Uk in 1935
    Corporate Ownership & Control / Volume 1, Issue 1, Fall 2003 CORPORATE BOARDS AND INCENTIVES: EMPIRICAL EVIDENCE FROM THE UK IN 1935 Marianne Pitts, Graham V. Sadler & Martin J. Conyon** Abstract We investigate boardroom governance using UK historical data for 1935. We demonstrate that there is a negative relationship between risk and incentives in this year. Prior research has produced anomalous results (Prendergast, 2002). Second, we show that average (median) board ownership of ordinary shares is about 7.95% (2.88%). Heuristically this figure is less than previously reported estimates for the US also using 1935 data. Finally, we show the phe- nomenon of multiple board membership. UK directors in 1935 hold many directorships – sometimes exceeding 10 concurrent memberships. Keywords: board membership, board ownership, board incentives 1. Introduction We investigate boardroom corporate governance using UK historical data for 1935. Relatively little is known about the structure of UK boards or the ownership of stock by board members at this time.1 Our contribution to the corporate governance literature is three-fold. First, we test for the existence of a negative association between incentives and risk. Principal-agent theory predicts that equilibrium risk and incentives are negatively correlated. However, empirical studies have often failed to detect this hypothesised relationship (Pren- dergast, 2002, page 1077). We isolate a robust negative relationship in our data set. We find that managerial ownership (incentives) and the volatility of returns (risk) are inversely related (demonstrated using OLS and quantile regression procedures). Second, we provide historical evidence on UK boardroom ownership in 1935. We find aggregate director ownership of ordinary equity shares on UK corporate boards in 1935 is about 7.95% of the total issued equity of their company.
    [Show full text]