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Models of corporate governance - Coggle Diagram
Models of corporate governance
Anglo-Saxon Model
Stakeholders
Shareholders
Interested in profitable activities and received dividends
Legislation limits shareholder intervention in activities
Managers
Responsible to Board of directors and shareholders
Authority derived from administrators
Consists of executive and non-executive directors
Board of directors
Characteristics
Based on enterpreneurship and private property
Control system is external
Oriented towards stock market
Uses the GAAP accounting systems
Strenghts and weaknesses
Strenght
Continuous discipline
Transparency
Weaknesses
Failure
Continental Model
Characteristics
Characterised by high concentration of capital
Oriented towards banking market
Considers shareholders property rights and company's relationships with its employees (Unions)
Control system is internal
Uses IFRS accounting system
National interest is strong
Stakeholders
Executive board
Manages the company
Responsible to stakeholders, unions and business partners
Supervisory council
Directs the executive board decisions
Chosen by employees and shareholders
Strenghts and weaknesses
Strenghts
Multiple risk carriers
Mutual benefit
Weaknesses
Slow reaction
Japanese Model
Characteristics
Designates industrial groups consisting of companies with common interests and similar strategies
Based on internal control
Flexible financing
Uses internal control system
Use both GAAP and IFRS accounting system
Stakeholders
Two Legal relationships
Co-determination between shareholders and unions, customers, suppliers, creditors and government
Relationship between administrators and stakeholders and managers
Strenghts and weaknesses
Strengths
Decreased optimism
Direct influence of owners
Weaknesses
Resistance to change