Raising Capital in the Cape Colony: The Role of Shareholder Protections
In this session of the International Business Seminar Series, Dr. Lloyd Maphosa examines how Cape Colony companies adapted corporate governance to attract investors and manage economic volatility. Using 451 company articles of association, he shows how firms often exceeded legal requirements to strengthen shareholder protections, offering fresh insight into the interplay of law, finance, and institutions in colonial contexts.
Corporate governance in colonial economies offers a revealing lens on how law, finance, and institutions evolved beyond core markets. In the Cape Colony, political instability and economic volatility shaped how companies seek to attract investors and ensure survival.
Dr. Lloyd Maphosa’s research investigates whether Cape firms voluntarily adopted stronger shareholder protections than required by law, showing how they adapted English legal traditions to local conditions. Using 451 company articles of association from 1892–1902, he constructs a Shareholder Protection Index spanning information access, shareholder voice, dilution protection, self-dealing constraints, and liquidity rights.
The study finds that Cape companies often exceeded statutory provisions and offered stronger protections than their British counterparts, particularly in limiting self-dealing and enhancing shareholder participation. This work challenges assumptions about the universal link between shareholder protection and firm performance, revealing how governance design evolved amid colonial uncertainty.
Dr. Lloyd Maphosa is a Research Fellow in the Centre for Economics, Policy and History project at Queen’s University Belfast. He completed his PhD in history in 2021 at Stellenbosch University. His work focuses on the financial history of the Cape Colony in the nineteenth and twentieth centuries.