The First Shareholder Advocate

Four hundred years ago, a Dutch investor named Isaac Le Maire wrote a pair of letters to the country’s most powerful politicians, seeking relief from what he deemed shareholder abuse at the Dutch East India Company. It is, he wrote, "indefensible that a company board could, under whatever pretext, retain another’s money for longer or use it in ways other than the latter wishes, for that would be a kind of tyranny."
 
Until recently, what appears to be the world’s first shareholder revolt has gone largely unnoticed by scholars. But researchers associated with SOM’s Millstein Center for Corporate Governance and Performance have unraveled the tale, which included rival expeditions around South America, a dead son, and ultimately, the invention of the short sale.

To mark the 400th anniversary of Le Maire’s action, the Millstein Center put out a call for papers on the origins and historical development of shareholder activism, covering the topic from a variety of angles: history of finance, corporate governance, economics, law, organizational behavior, and political science. The Millstein Center will hold a conference on the subject in November 2009.

Listen to Stephen Davis, senior fellow at the Millstein Center, discuss Isaac Le Maire and his unique place in financial history. (10:24)