This presentation was delivered at the Social Sciences for Development conference 2015, hosted by Stellenbosch University in September of that year. It is a summary of a paper of the same name that investigates the impact of the VOC on the development of finance and nation of South Africa. Parallels between investors of the 17th and 21st Century are discussed and the ethical dimensions of their investment objectives.

1. THE IMPACT OF INVESTING:
A retrospective view on the impact of
investment into the Dutch East India
Company on South Africa and the
development of finance
1
SSD Conference, Stellenbosch
Colin Habberton
10 September 2015

2. 3
Introduction
“Nescire autem quid antequam natus sis
acciderit, id est semper esse puerum.”
Cicero
“To be ignorant of what occurred before you
were born is to remain always a child”

3. 4
Research Objectives
• Compare the corporate structure and
governance of the VOC to modern corporations
to understand differences and similarities.
• Assess the impact of the establishment and
operation of the VOC on the development of
finance.
• Describe the impact of the VOC, as a multi-
national corporation, on the history of South
Africa from an environmental and social
perspective.
• Interpret the findings using the United Nations
Principles of Responsible Investment as a
conceptual framework to explore the connections

4. 5
Research Question
What was the impact of investing in
the VOC?

5. Research methodology
• Exploratory study through a literature review
of academic research and archival sources
• The VOC is the unit of analysis
• Looking into South Africa as a case study
• Outcomes assessed against a normative
framework called the United Nations’
Principles for Responsible Investing
(UNPRI)
6

6. Literature Review – Key
Sources
History of the VOC
• Gelderblom, O., & Jonker, J. 2004. Completing a Financial Revolution: The Finance of
the Dutch East India Trade and the Rise of the Amsterdam Capital Market, 1595-1612.
The Journal of Economic History. 64, 641-672.
• Gelderblom, O,. De Jong A., and Jonker,J. 2013. The Formative Years of the Modern
Corporation: The Dutch East India Company VOC, 1602–1623. The Journal of Economic
History. 73.04:1050-1076.
• TANAP. 2015. Towards a New Age of Partnership Website [Online] Available:
http://www.tanap.net/ Accessed: 5 August 2015
The Principles of Responsible Investing
• UNEPFI. 2014. About UNEP FI [Online] Available: http://www.unepfi.org/about/index.html
Accessed: 15 July 2014.
• UNPRI. 2015. UNPRI Website [Online] Available: http://www.unpri.org/ Accessed: 11
August 2015.
VOC as a Corporation
• Hansmann, H. & Kraakman, R. 2000. The End of History for Corporate Law. Harvard
Law School John M. Olin Center for Law, Economics and Business Discussion Paper
Series. Paper 280.
• Lucassen, J. 2004. A Multinational and its Labor Force: The Dutch East India Company,
1595-1795. International Labor and Working Class History. 12.
• Vink, M. P. 2007. Freedom and slavery: the Dutch Republic, the VOC World, and the
debate over the 'World's Oldest Trade': feature. South African Historical Journal. 59:19-
7

7. Literature Review – Key
Sources
VOC and its impact on finance
• Kyriazis, N., & Metaxas, T. 2011. Path dependence, change and the emergence of the first joint-
stock companies. Business History. 53:363-374.
• Nijman, J. 1994. The VOC and the expansion of the world-system 1602–1799.Political
Geography, 13(3):211-227.
• Robertson, J., & Funnell, W. 2012. The Dutch East-India Company and accounting for social
capital at the dawn of modern capitalism 1602-1623. Accounting, Organizations and Society.
37:342-360.
• Stringham, E. 2003. The extralegal development of securities trading in seventeenth-century
Amsterdam. Quarterly Review of Economics and Finance. 43:321-344.
VOC in South Africa
• Dangor, S. E. 2003. The establishment and consolidation of Islam in South Africa: from the
Dutch colonisation of the Cape to the present. Historia. 48:203-220.
• Devenish, G. 2005. South Africa from pre-colonial times to democracy: a constitutional and
jurisprudential odyssey. South African Law. 547-571.
• Guelke, L. 2003. The tragedy of privatisation : some environmental consequences of the Dutch
invasion of Khoikhoi South Africa. South African Geographical Journal = Suid-Afrikaanse
Geografiese Tydskrif. 85:90-98.
• Scott, G., & Hewett, M. 2008. Pioneers in ethnopharmacology: The Dutch East India Company
(VOC) at the Cape from 1650 to 1800. Journal of Ethnopharmacology. 115:339-360.
• Tewari, D. 2009. A detailed analysis of evolution of water rights in South Africa: an account of
three and a half centuries from 1652 AD to present. Water SA. 35:693-709.
• Worden, N. 2007. New approaches to VOC history in South Africa: feature. South African8

8. 9
Why the UNPRI?
(Source: UNPRI, 2015)
US$60tn
AuM
25% of
global
assets
1380+
Signatorie
s

9. Principles for Responsible
Investing
10
(Adapted: UNPRI, 2015)

10. What do I mean by “ESG”?
11
(Source: UNPRI,

11. How big was the VOC in today’s
terms?

12. 13
The ‘United’ Dutch-East India Company
• Established by sovereign charter in 1602
• Rights to trade by the Netherlands in East
Indies
• In the footsteps of British, French and Danes
The Purpose of the ‘Compagnie’
• Profit
“The country trade and the profit from it are the
soul of the Company which must be looked after
carefully because if the soul decays, the entire
body would be destroyed”
The VOC as a Corporation

13. A Multi-National Company

14. 15
‘Textbook’ corporation (Gelderblom et al)
Kraakman’s (2000) summary of
characteristics:
• (i) full legal personality distinct from
owners
• (ii) limited liability for owners and
managers
• (iii) shared ownership by investors of
capital
• (iv) delegated management under a
The VOC as a corporation

15. National collaboration

16. 17
Collaboration between chambers of business
• Amsterdam, Delft, Middelburg, Enkhuizen,
Rotterdam and Hoorn
• Independent of the state and the crown
Board of Directors by proportional representation
• Heeren XVII: highest level of authority, decision-
making
• Consolidation of assets, appointed management
Ownership of the company via ‘shareholders’
• Capital raised from the public with limited liability
• Continuity of capital and charter
The VOC and its Governance

17. The first traded shares

18. 19
The phenomenon of VOC shares
• Initial capital raised:10x its British
competitors
• Public offer:1,100+ European shareholders
• Minimum10 year investment: trading
ensued
• Share price rose 500%+, annual return 25%
The realities of return
• Lucrative spice trade – Intra- & inter-national
• Dualistic mindset towards slavery,
exploitation
VOC and the development of finance

19. The VOC share price
performance
20
(Source: Stringham, 2013:327)

20. “Windhandel”
21
(Source: Rijks Museum)

21. “Windhandel”
22
(Source: British Museum)

22. 23
Economic
• Refreshment station for VOC fleet – agriculture
• Infrastructure, urbanisation, globalisation
• Fort developed into a city spawned a nation
Social
• Importation of labour – slaves, migrants
• Incarceration of rivals from South & East Asia
• Multi-cultural diversity from mid-1650’s
Environmental
• Private property, water rights – Roman-Dutch
law
VOC and its impact on South Africa

23. Who is this Guy?

24. The ‘real’ Jan van Riebeeck

25. Remember this?

26. The Compagnie Flag of the
1600’s…

27. 28
Accountability
• Governance structures existed but,
• Aim: profit for shareholders (and
management)
• Result: exploitation of people and their
places
• Parallels to the investment practices of
today
Responsibility
• Delivery on investor expectation exceptional
Conclusions & Comparisons

28. 29
Participation
• Introduced structures of global governance
• Established the archetype of the corporation
• Exported systems of law, finance &
inequality
• Share in profits vs. share in consequences
Transparency
• Business is more than ‘just business’
• Good governance ≠ moral, ethical
outcomes
Conclusions & Comparisons

29. Final Thoughts…

30. Simon van der Stel: Governor &
Founder

31. THE IMPACT OF INVESTING:
A retrospective view on the impact of
investment into the Dutch East India
Company on South Africa and the
development of finance
32
SSD Conference, Stellenbosch
Colin Habberton
10 September 2015