Professional Documents
Culture Documents
GOVERNANCE
Prepared by:
Nyanapriyaa Mageswaran
Noor Shazwani Bt Baharum
Prepared for:
Dr. Nor Zalina binti Mohamad Yusof
Presented on:14th May 2016
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Models Of Corporate
Governance
Differences in Corporate
Model
There are 2 major corporate models in use in the
world today:
Shareholder Wealth Structure (aka, Anglo-American
or Anglo-Saxon) Model:
Believes that a firms objective should be to maximize
shareholder wealth.
Shareholder Wealth countries include the US, Canada,
Australia, United Kingdom.
Corporate Wealth Structure (aka, Non-Anglo-
American) Model:
Believe that a firms objective should be to maximize
corporate wealth (which includes all stakeholders; e.g.,
employees, community, banks, owners)
Corporate Wealth countries include the EU, Japan and
Latin American countries.
Shareholder Wealth
Model
This model focuses on the importance of
includes:
Advisory Committees (with labor representation): important in
countries.
This is changing somewhat, e.g., in Japan and in Europe there
Anglo-Saxon Shareholder
Ownership
The two routine corporate actions requiring
Anglo-Saxon Shareholder
Ownership
There is one important distinction between the US and
the UK:
in the US, shareholders do not have the right to vote on the
Anglo-Saxon Shareholder
Ownership
The Anglo-US model establishes a complex,
Board of
Directors
(Supervisor)
Appoint50%
Stakeholder
s
Management
board(including labor
Relation officer)
Stake In
Manage
Monitors & regulates
Creditors
Lien On
Company
Regulatory/L
egal system
Own
Japanese Share
Ownership
Because
Supervisory
Board (including
President)
Provides managers
Consults
Main bank
Executive Management
(Primarily Board of
Directors)
Own
Manage
Company
Provides
Loan
Owns
boards
The supervisory board
The executive board.
German (Continental)
Model
Co-determination - partnership between
Employees and
Labour unions
Supervisory
Board
Appoint and
supervises
Management
Board
(including
Labour Relation
Board)
Manage
Company
Appoint
50%
Shareholder
Own