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What's really out there?? Unit 5 - Activity 8 CORPORATE GOVERNANCE…
What's really out there??
Unit 5 - Activity 8
CORPORATE GOVERNANCE MODELS
1. Japanese model of Corporate Governance
Called "Keiretsu" -
Meaning headless combine.
Keiretsu is characterized by a business network made up comprising various companies closely interrelated and often obtains small equity stakes in the multiple businesses.
The organizations still operates completely independently.
High levels of stock that are owned by other businesses and banks.
Strong links to banks thus governance models influenced by banking policies.
Two tiered board formation
Controlling shareholder dominated.
Mechanism of control: Internal
Stakeholders
Main bank of Japan (Major inside shareholder)
Board of directors (composed solely of insiders of the company)
Affiliated / Keiretsu companies
Management
Government
2. Anglo American model of Corporate Governance
Also called Anglo Saxon model of corporate governance
Practiced in:
USA
UK
Canada
Austria
Other common wealth countries
Banks only slightly engage in the operations and corporate governance of organizations.
Market is a active control mechanism over organization governance.
Clear separation between control and ownership
Mechanism of control: External
Main Stakeholders:
Board of directors (executive- and independent)
Management
Shareholders
Market is main mechanism for corporate governance.
No employee representation.
3. German model of Corporate Governance
Also called: Two tiered board model of Corporate Governance
Similarly to Japanese model, it is focused toward banking market.
Employee's rights and views are well represented and ingrained in corporate governance decisions.
Mechanism of control: Internal
Main stakeholders
Two tier board of directors appointed:
Management board
No members of overesight board allowed to serve on management board.
2. Oversight board
12to 20 representatives. 10 elected by shareholders, 10 comprise of employee representatives.
German banks