Horse, Cow, Sheep, or 'Thing-In-Itself'? The Cognitive Origins of Corporate Governance in Switzerland, Germany, and the U.S., 1910s-1930s

This paper investigates into the origins of the shareholder-oriented corporate governance (CG) model of the US and the stakeholder-oriented model prevailing in continental Europe throughout the 20th century. Contrary to mainstream theories, which explain different CG models by different legal traditions, we interpret the emergence of two different models in the US and in Continental European countries as a sequence of changes in which different conceptions of the corporation formulated by legal scholars played an important role. We show that during the period from the 1910s to the 1930s, with the increasing size of firms, new corporate governance problems arose. Scholars in Switzerland, in Germany, and in the US diagnosed this development - which mainly concerned the position of small shareholders - in different ways and proposed different remedies. These diagnoses and remedies informed political decision-makers in times of uncertainty and contributed, thus, in important ways to shaping the different 'paths' which continental European countries and the US went down subsequently