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CORPORATE GOVERNANCE MODELS - Coggle Diagram
CORPORATE GOVERNANCE MODELS
JAPANESE MODEL
: Collective decision-making creating harmony among stakeholders with an emphasis on stability over short-term shareholder primacy
STAKEHOLDERS
Management (responsible for managing employees and ensuring that there is a clear communication bridge between shareholder needs and employee needs a
Shareholders (secondary stakeholders)
Financial institutions (Keiretsu networks/cross shareholding to encourage alliances, collaboration and mutual support)
Customers (secondary stakeholders)
Suppliers (long term relationships)
local communities (secondary stakeholders)
Employees (long term employment)
ANGLO-AMERICAN MODEL
: Shareholder-centric model where increasing investor returns is the main objective
STAKEHOLDERS
Customers (secondary stakeholders - are required for profits but not the main objective thus easily neglected)
Employees (secondary stakeholders - are required for production, manufacture and control but not the main objective thus easily neglected)
Shareholders (Decisions are judged based on financial impact to shareholders making them the main stakeholders)
Communities (secondary stakeholders - are required for social and political reputation but not the main objective thus easily neglected)
GERMAN MODEL
: Balances interests of shareholders, employees, customers, and society with a two-tiered board system: Supervisory Board (oversight role, free from daily operations) and Management Board (drive day-to day functions)
STAKEHOLDERS
Management (Handles day-to day operations; strategic planning and ensures operational efficiency)
Customers (secondary stakeholder contributing to profits)
Employees (actively involved in governance; almost 50% of Supervisory board seats reseved for employee representatives)
Communities (secondary stakeholder contributing to society and public opinion)
Shareholders (Holistic view on corporate success; aligns corporate objectives with societal needs to encourage sustainable growth and ethical practices)
Regulators (Independent board members to ensure impartiality)