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Corporate Governance Models - Coggle Diagram
Corporate Governance Models
Anglo-American Model (Shareholder Model)
Shareholders
= are in control and supply the funds which they can withdraw if not satisfied
Shareholder interest must be maximised
Incentives for management to ensure shareholder goals
Board chairperson and CEO are different people
Success of this models depends on ongoing communications among board, management and shareholders
Continental Model
Controlling authority consists of supervisory board and management board
Management board
= company insiders (executives)
Supervisory board
= outsiders (shareholders and union reps, bank reps); size is determined by a country's laws and can't be changed by shareholders
The two boards remain entirely separate
National interests have a strong influence on corporations with this model of corporate governance.
Companies can be expected to align with government objectives
This model also values the engagement of stakeholders, as they can support and strengthen a company's continued operations
Japanese Model
Key players
= banks; affiliated entities, major shareholders (
Keiretsu
), management and the government
Board of directors: insiders (incl company executives).
Keiretsu
may remove directors from the board
Government affects the activities of corporate management via regulations and policies
Corporate transparency is less likely with this model because of the concentration of power and the focus on the interests of those with that power