Adam Smith’s rebuke of corporate boards

“Joint stock companies, established by Royal Charter or by Act of Parliament, differ in several respects, not only from regulated companies, but from private copartneries.” (Smith 1784, p. 58) Thus far (see here and here), we have surveyed the first 14 paragraphs of the last part (Part #13) of Adam Smith’s pamphlet Additions and Corrections to the First and Second Editions of Dr. Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations (Smith 1784). This last part deals with overseas trading companies, which (as we saw in my previous post) can be organized as a “regulated company” (i.e. a state-sanctioned cartel) or as a “joint stock company” (the precursor of the modern corporation). Now, let’s pick up where we left off. Next, Smith compares and contrasts the main features of “joint stock companies” with those of “private copartneries” (or general partnerships) in paragraphs 16 and 17 of Part #13: “First, in a private copartnery, no partner, without the consent of the…