The Quakers and the Joint Stock Company: Uneasy Bedfellows

The twenty-first century has witnessed a number of corporate scandals and private-sector take-overs that have called into question the shareholder-focused economy. By way of contrast, this chapter focuses on the Quakers as a (largely forgotten) exemplar of good organisation and good governance that has traditionally distinguished itself from the shareholder model. Since their origins in the mid-17th century, the Quakers were known for their honest and honorable business practices, their enlightened approach to employee welfare, their concern for wider society, and their willingness to innovate. Today, most of these ‘Quaker’ businesses are no longer either owned or controlled by Quakers, and have almost invariably adopted the conventional shareholder model of corporate governance. In this chapter, we identify innovations in corporate law in the mid-nineteenth century and especially the introduction of limited liability as important, though largely overlooked, reasons for their demise. These changes provided the legal basis for the Quaker family firms to incorporate, which many of them did in the late nineteenth century. We argue that this change inexorably decanted the unique Quaker ethos out of these companies during the twentieth century as the Quakers slowly lost both ownership and control of their businesses. We then inquire into how the Quaker story might help us reimagine the theory and practice of corporate governance and management.