Corporate governance models

Anglo-Saxon model (Anglo-US Model)

crafted by the more individualistic business societies in Great Britain and the United States

Shareholders

vote for

Board of directors

Most companies with Anglo-US corporate governance systems have legislative controls over shareholders' ability to assert practical, day-to-day control over the company

The capital and shareholder structure are highly dispersed

regulatory authorities, such as the U.S. Securities and Exchange Commission (SEC), explicitly support shareholders over boards or managers

Appoint and control

Managers and chief officers

Board of directors and the shareholders are the controlling parties

beholden to voting shareholders' approval

Derive their authority from the board of direcors

The managers and chief officers ultimately have secondary authority

The Continental Model (German model)

supervisory board

Appoints and Oversees

Size is determined by country laws

Consisting of outsiders: shareholders, union representatives, employees, banks

National interests (government and popular priorities) have a strong influence. Companies can be expected to align with government objectives

management board

banks play heavy role in investment

Large union and employee interests

The Japanese Model

Banks

Smaller, independent, individual shareholders have no role or voice

major shareholders
(called Keiretsu)

Appoints

Supervision board
including president

board of directors / exclusive management
is usually made up of insiders, including company executives

Keiretsu may be invested in common companies or have trading relationships

Provides managers

Regulators

Corporate management

Consists of company insiders: executives

The government affects the activities of corporate management via its regulations and policies

central banks

Japanese Ministry of Finance

business entities, the government, union groups

Legislature

Regulatory authorities

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