ABSTRACT
This chapter explores the evolving relationship between managers, directors, shareholders and companies over the course of the twentieth century. It shows that hard law and soft law have exercised a powerful influence over the way in which companies are managed and governed in the United Kingdom (UK). The chapter examines how changes to industrial activity drove the emergence of managerial authority in UK companies. It argues that the new authority was accommodated within existing legal structures but depended on company-specific arrangements for its continuity. The chapter looks at how those arrangements were undermined and dismantled following changes to UK company law and corporate governance policy from the second half of the twentieth century onwards. It examines the legal changes that contributed to the emergence of the hostile takeover, the pressure from policymakers for companies to have boards dominated by non-executive directors and to align executive incentives with shareholder interests, and finally the recent drive to encourage shareholder engagement.
