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Unit 5: Lesson 2 - Activity 8: What's really out there? The "…
Unit 5: Lesson 2 - Activity 8: What's really out there? The "How" - Mind Map - Click here!
The Anglo-American Model
Explanation
Centred around creating the most value for shareholders
Focuses on board independence
Encourages shareholder inclusive decision making
Encourages incentive based remuneration for directors- increasing shareholder value should result in more rewards
Stakeholders;
Shareholders
Board of directors
Management
Employees
The Japanese Model
Stakeholders
Keiretsu partners
Cross shareholding companies
Other normal stakeholders
Explanation
Concentration on long-term objectives
Keiretsu and Cross-Shareholding encourages cooperative relationships between member companies
Consensus driven decision-making.
Shareholders have less input than other models
The Continental Model
Stakeholders
Supervisory board
Board or directors
Shareholders
Employees
Explanation
Focused on creating value for all stakeholders, not just shareholders
Dual board structure: managements board overseen by supervisory board
Employees have more active role in decision making
Chen, J. (no date) Corporate governance: Definition, principles, models, and examples, Investopedia. Available at:
https://www.investopedia.com/terms/c/corporategovernance.asp
(Accessed: 09 February 2024).