Corporate Governance Before There was Corporate Law

What would a company's corporate governance structure look like in the absence of corporate law? Despite the attention given to corporate governance, we know relatively little about what an optimal corporate governance structure should look like, or wheth er laws regulating corporate governance move us closer, or farther away, from that optimum. This is due to the fact that modern governance structures have evolved inside a system of laws and regulations that have long dictated, at least in part, how the structures should look. Thus, it is hard to disentangle what corporate governance provisions would be designed by contract if there were no regulatory interference, and how, if at all, regulations improve upon what contracts alone could accomplish. To answer these questions, this project exploits that prior to 1910, Norway had no corporate law---a company could be created and organized for commercial purposes as a limited liability corporation, with full judicial recognition as a separate legal entity, though no law existed to govern this organizational form. Our findings help improve our uderstanding of: (1) how corporate governance systems function in the absence of corporate law and (2) the value of corporate law once it is introduced.