The Long-Term Relationship between Episodic and Systemic Power: Dividend Distributions at the Dutch East India Company

Wim Van Lent, IESEG School of Management

Corporate governance, and in particular the (re)distribution of capital, is rife with power dynamics. Next to episodic power, which is involved in actors’ attempts to directly affect organizational decision-making through discrete political acts, there is systemic power, which shapes organizational truths through vested institutional structures. However, although the relationship between episodic and systemic power has been acknowledged, their long-term interaction remains elusive, because systemic power often develops over long periods of time. This lacuna is important, because it limits understanding of the role that corporate structures play in the accumulation of capital. To address this gap, I perform a historically grounded analysis of the Dutch East India Company, focusing on a key outcome of corporate governance: the payout of dividends. My reconstruction of nearly two centuries of dividend policy at this company reveals that an emerging class of “outsider” merchant investors who sought a better payoff performed symbolic action, thus invoking episodic power, to set the agenda and quickly affect dividends, while the Company’s patriarchic managerial elite preferred capital reinvestments. Substantial change in dividend payouts only came with decades-long structural work in the form of share acquisitions, which enabled the projection of systemic power. The analysis demonstrates that over a longer period of time, episodic and systemic power are related in an indirect and additive way, producing what will be called a “temporal layering” of power in corporate governance.

No extended abstract or paper available

 Presented in Session 222. The Dutch in the World, 1500–Present: From Small Republic to Global Might, Then Fading Light?