An Incomplete Revolution: Corporate Governance Challenges of the London Assurance Company and the Limitations of the Joint-Stock Form, 1720–1725
Published online by Cambridge University Press: 13 August 2019
The London Assurance (LA) was incorporated in 1720, marking a significant innovation in the marine insurance industry. Contemporaries anticipated joint-stock firms such as the LA would rapidly outcompete private underwriters, yet this outcome did not occur. The success of the private underwriters has been ascribed to their organizational form. This paper reassesses these explanations and finds that, rather than an a priori worse business model, various corporate governance challenges limited the LA’s capacity to compete. This provides a more complete explanation for the relative failure of the joint-stock marine insurance companies and has implications for understanding the evolution of the corporate form in the eighteenth century.
- Copyright © The Author 2019. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.
Michael Aldous and Stefano Condorelli conceived and developed this article together. Michael Aldous wrote the sections: Introduction, Britain’s Evolving Economy in the Early Eighteenth Century, The Incorporation Debate, Creating a Strategy and Structure (paragraphs 6-10); Stefano Condorelli wrote the sections: Establishing a Marine Insurance Corporation, Creating a Strategy and Structure (paragraphs,1-5, 11), An Evolving Strategy, Explaining These Outcomes.