Directors and Shareholders
F.S. Gaastra
fter
the founding of the VOC in
1602, the seventy-six directors who had headed the voorcompagnieën
were placed in control of the new company. The charter which
established the monopoly and the duration of the business,
albeit provisionally limited to twenty-one years, altered
the position of the directors. They now formed a real board,
a managerial group, with its own aims, which were distinct
from those of the shareholders. Of course they were themselves
important investors and, as such, their position and interests
did not differ from those of the other shareholders. But as
managers they strove to increase the turnover, and for continuity
and consolidation, rather than for any short-term profit which
would give the investors a quick return on their investment(6).
In this the directors enjoyed the protection of the charter.
Only after ten years, thus after the expiry of the first decennial
capital account, were they required to open the books and
to account to the shareholders.
The incomes of the directors
were fixed at a certain percentage of the turnover: at one
per cent of the expenditure on the outfitting or equipages
and at one per cent of the profits from the sale of the retourgoederen
(return wares). Directorship was for life. Shareholders had
no influence at all on the appointment of new directors. Directors
were supposed to have shares in the VOC
set at a fixed minimum amount: fl. 6,000 (in the chambers
of Hoorn and Enkhuizen fl. 3,000). This sum was regarded as
a surety; the directors were held responsible for instances
of mismanagement or fraud though it was set down in the charter
that directors were not personally liable for debts incurred
by the Company. As has already been said, the stipulations
in the charter which favoured the shareholders - the rapid
distribution of dividends from the profits made on the imports
and the liquidation of the capital after ten years - were
not observed by the directors. In short, in return for the
right that the charter gave the directors to manage the VOC,
there were few obligations, and even these were not strictly
observed.
The charter fixed the number
of directors at sixty: twenty in the Amsterdam Chamber, twelve
in that of Zeeland and seven in each of the smaller chambers.
In view of the fact that at the time that the VOC
was founded there were more directors in all the chambers
except that of Hoorn, for the time being there were to be
no new appointments when a vacancy occurred. The appointments
procedure, which was prescribed in 1602, gave the States of
Holland, and for the Zeeland Chamber the States of Zeeland,
the right to choose a candidate from a nomination list of
three persons, which had been compiled by the directors still
in office in the Chamber concerned. Upon the insistence of
the Zeelanders this stipulation was included in the charter.
However, in Holland it was never applied. A few days before
the charter was issued, the States of Holland, at the suggestion
of the city of Amsterdam, passed a resolution in which the
choice from the list of three nominees was made the responsibility
of the burgomasters of the city in question. For indeed, the
burgomasters had, so ran the argument of the Amsterdammers,
vaste kennisse (reliable knowledge)
of the capacities of the candidates.
The Zeeland determination to
leave the choice of the candidates to the States was probably
prompted in order to prevent problems within their own circles.
The situation there was more complicated than it was in Holland.
Citizens of Veere and Vlissingen had had interests in the
voorcompagnieën in Zeeland,
and these two cities did not want to relinquish their share
in the trade with Asia in 1602. Finally, after a lot of rows,
both the cities succeeded in each obtaining two directors'
seats in the Zeeland Chamber. Veere lost its seat as early
as 1603, because the director from Veere, Balthasar de Moucheron,
resigned his place. As there were thirteen directors still
in office, one more than prescribed by the charter, there
was no question of filling this vacancy. In later years Veere
never succeeded in winning back this second seat, despite
a stubborn battle which recurred every time there was a new
appointment. Middelburg kept a firm hold on the nine places
that it had in its grasp, and the States of Zeeland took its
side. The States of Zeeland held onto their right of nomination
until 1646; after this the cities themselves assumed this
right, and each city could fill its own places.
The outcome of this was that
an intimate relationship developed between the regents of
the cities and the directors. Party factions, political antitheses
and cabals could very easily infiltrate the boards of directors.
However, from the close ties between the city regents and
the VOC directors one cannot
draw the conclusion that merchants gradually had to make way
for administrators; certainly in Amsterdam good care was taken
to see that business expertise was maintained on the board.
One of the consequences of the system of appointments employed
is that in municipal archives there is a great deal of information
to be found about the appointment of directors.
Besides the sixty directors
mentioned in the charter of1602, in the course of time directors
from outside the Chamber cities took their places on the boards
of directors. This so called extraordinair
or buitengewoon (extraordinary) directorship grew up
as the result of the demands made by various provinces after
the States General had granted the VOC
some not insubstantial subsidies in 1606. Because they demanded
to be able to supervise how this money was spent in 1613 and
1614 Gelderland, Utrecht, Friesland and the city of Dordrecht
(als eerste en voorsittende stad,
as premier and presidential city in Holland) were each granted
the right to appoint one director. Dordrecht had already attempted
to obtain influence in the VOC
in 1602 by organizing a capital investment by a great many
of its citizens. The city was thus able to achieve this aim
in 1614. In 1642, at the time of the second renewal of the
charter, a similar post was also granted to Overijssel and
Stad en Lande.
The vicissitudes which preceded
the second renewal of the charter (in 1642) also offered various
cities in the provinces of Holland a fine opportunity to get
their hands on a director's place. There had already been
a quarrel between Dordrecht, Amsterdam and Haarlem in 1636.
The extraordinary directorship of the first mentioned city
had more or less been informally transformed into an ordinary
one, because the representative from Dordrecht, Elias Trip,
had moved to Amsterdam during his term of office and thereafter
was counted as an ordinary Amsterdam director. After Trip's
death, Dordrecht wished this situation to continue, but, on
the basis of the order of precedence among the cities of the
States of Holland, Haarlem thought that its turn had come
and therefore claimed the directorship that had previously
been held by Dordrecht. During the discussion about the continuation
of the charter which erupted shortly afterwards, it was made
clear to the Company that they had to offer the cities something
in return for support for the renewal. Haarlem and Leiden
came off best; these cities secured an ordinary directorship
in the Chamber of Amsterdam, but they could only take their
seats in 1648. Besides its extraordinary directorship in the
Amsterdam Chamber, Dordrecht obtained a similar place in one
of the chambers in the Zuiderkwartier
(Southern District, Delft and Rotterdam), later only in Rotterdam.
Alkmaar was allowed a director who occupied a place in Hoorn
and Enkhuizen in rotation. Gouda lagged behind a little, but
later, in 1665, succeeded in securing a place in the Amsterdam
Chamber. Much later, in 1696, the Ridderschap
van Holland secured two ordinary directors' seats in
the smaller Holland chambers. These seats were counted over
and above the fixed number of sixty.
Thus, in the time-honoured custom
of the Dutch Republic the administrative structure had become
extremely complicated. Moreover, the smaller chambers did
not observe the formal rules. In the chambers of the Noorderkwartier
(Northern District, Hoorn and Enkhuizen), the director from
Alkmaar was regarded as an ordinaris.
This director continued to take his seat in whichever Chamber
a place had fallen vacant, which meant that the Hoorn Chamber,
or as the case may be that of Enkhuizen, sometimes only contained
six directors from its own city. After 1669 this same happened
with the director from the Ridderschap
in the chambers of the Zuiderkwartier(7).
(See the webpage with a survey of the composition of the boards
of directors.)
During the seventeenth century
various modifications were made, not only in the number of
directors, but also in their emoluments and election, and
in the role of the shareholders. There was a great deal of
discontent among the shareholders about the failure to honour
the obligations laid down in the charter of 1602 with respect
to the distribution of dividends and the establishment of
the capital, as well as about the less than open attitude
of the directors towards financial matters. Furthermore, suspicions
that the directors were lining their own pockets at the Company's
expense were rife among the shareholders. During the lifetime
of the first charter this led to blazing rows. When the charter
came up for renewal the States General made some small concessions
to these complaints. First of all, changes were made in the
way in which the directors were reimbursed. In future the
one per cent commission would be calculated from the expenditure
for the outfitting and from the net, instead of the gross,
profits from the sales. This meant a drop in remuneration.
In 1647 the whole regulation was abrogated and replaced by
a fixed salary of fl. 3,100 per annum for the directors of
the Amsterdam Chamber, fl. 2,600 for those in Zeeland, and
fl. 1,200 for the directors of the smaller chambers. Moreover,
in 1623 the directorship was fixed at a three-year term, but
this ruling was soon disregarded: later on it seems that in
most instances directors occupied their seats until their
deaths.
Furthermore, in 1623, via a
very complicated procedure, some control and say was granted
to the shareholders by the establishing of three commissions
of hoofdparticipanten (principal
shareholders) - that is to say those from whom it was demanded,
as it was of the directors, that they had at least fl. 6,000
invested in the chambers of either Amsterdam or Zeeland and
fl. 3,000 in the smaller chambers(8).
One of these boards, that of
the rekeningopnemers (inspectors
of accounts), would inspect the generale
rekeninge (general accounts) which had to be presented
for the first time after the expiry of the first charter in
1622. After 1647 this financial accountability took place
every four years, not just in the presence of the inspectors
of accounts, but also in that of a committee from the States
General.
The second board of principal
shareholders functioned by chamber and was assembled when
a directorship fell vacant. By means of affixie
van biljetten (posting of bills) the same number of
principal shareholders as there were directors still sitting
was summoned; thus the directors and the principal shareholders
formed an electoral college which was empowered to draw up
a nomination list of three persons. In practice once again
the chambers followed their own rules. In Zeeland, for instance,
twice as many principal shareholders as directors assembled.
In Amsterdam, by contrast, the main shareholders showed little
enthusiasm for such meetings; usually only a few deigned to
put in an appearance.
Finally nine principal shareholders
were delegated by the chambers to attend the meetings of the
Heren XVII and participate
on their various committees, in which they were entitled to
make recommendations. Four of them came from Amsterdam, two
from Zeeland and three from the remaining smaller chambers,
which meant that in turn each of these smaller chambers had
to do without such a principal shareholder as a delegate.
Their election took place in much the same way as that of
the directors: shareholders compiled a list of nominations
consisting of three persons, from which the local burgomasters
made their choice. As these shareholders were obliged to swear
an oath in the presence of the burgomaster (as did the directors),
they were known as beëdigde hoofdparticipanten
(sworn principal shareholders).
Yet another modification was
made to these electoral regulations in 1749. Then, following
a proposal from principal main shareholders of the VOC,
the stadhouder, William IV,
was appointed opperbewindhebber
(director-general). It was now the prerogative of the stadhouder
to make a choice of new directors and new certified shareholders
from the short-list of three names. However, neither William
IV nor his successor, William V, took any direct interest
in the administration; they were represented in the boards
of directors of the chambers and in the meetings of the Heren
XVII by a representant(9).
Finally, in 1786, when the
Company was forced to turn to the government for support,
at the suggestion of the States of Holland the board of directors
of the Amsterdam Chamber was increased by six people. A political
battle had preceded this move. The original idea of the States
of Holland had been that several more directors should also
be nominated in Zeeland. Those directors who had espoused
the cause of reform and who had been appointed by the Patriot-influenced
administration would mainly concern themselves with the Asian
side of the enterprise. But Zeeland opposed this and, as a
result, the extension of the boards of directors was confined
to Amsterdam. In this Chamber the newly appointed directors
formed the Departement tot de Indische
Zaken (Department for Asian Affairs), which was also
known as the Vijfde Departement
(Fifth Department). In view of the fact that the anti-Orange
Patriots had the upper hand
in Holland, initially this appointment was not made by the
stadhouder, but by the States
General on the recommendation of the States of Holland. When
the political situation altered in 1788 and the stadhouder
regained his former power, his rights were also restituted
in this respect. In 1790 the Zeeland Chamber finally gave
its approval to the introduction of this administrative body,
which from that time on was known as the Preparatoir
Besogne (Preparatory Committee)(10).
The invasion of the French
and the establishment of the Batavian Republic brought the
regime of the old management to an end. By decree of the States
General dated 24th December 1795, the directors were relieved
of their office per 1st March 1796. The management of the
Company was entrusted to the Comité
tot de Zaken van de Oost-Indische Handel en Bezittingen,
which consisted of twenty-one members.
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