An admiralty for Asia: Business organization and the evolution of corporate governance in the Dutch Republic, 1590-1640

The Dutch East India Company (VOC) in 1602 showed many characteristics of modern corporations, including limited liability, freely transferable shares, and well-defined managerial functions. However, we challenge the notion of the VOC as the precursor of modern corporations to argue that the company was a hybrid, combining elements from traditional partnerships with a governance structure modeled on existing public-private partnerships. The company’s charter reflected this hybrid structure in the preeminent position given to the Estates General as the VOC’s main principal, to the detriment of shareholders’ interests. Protests by Isaac le Maire and Willem Usselinx about the board’s disregard for shareholders were rooted in a conviction that it ought to conform to traditional partnerships with their judicious balance between stakeholders’ interests. However, the perceived public interest of a strong military presence in Asia prevented shareholders’ protests from changing the corporate governance.