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Governance
By:Dushyant Maheshwari
MODELS OF CORPORATE
GOVERNANCE
ANGLO
AMERICAN MODEL
GERMAN MODEL
JAPANESE MODEL
INDIAN MODEL
Anglo-American Model
This model is also called an Anglo-Saxon model and is used as
basis of corporate governance in U.S.A, U.K, Canada, Australia, and
some common wealth countries.
The shareholders appoint directors who in turn appoint the managers
to manage the business. Thus there is separation of ownership and
control.
The board usually consist of executive directors and few
independent directors. The board often has limited ownership stakes
in the company. Moreover, a single individual holds both the position
of CEO and chairman of the board.
THE-ANGLO AMERICAN
MODEL
fd
Elect
Shareholders
Board of Directors
(Supervisor)
Stakeholders
Appoints and
supervises
Officers
(Manager)
Manage
Creditors
Company
Monitors
&
regulates
Regulatory/Le
gal system
German Model
This is also called as 2 tier board model as there are 2 boards viz.
The supervisory board and the management board. It is used in
countries like Germany, Holland, France, etc.
Usually a large majority of shareholders are banks and financial
institutions. The shareholder can appoint only 50% of members to
constitute the supervisory board. The rest is appointed by employees
and labour unions.
Supervisory Board
Appoint 50%
Appoint and
supervises
Employees and
Labour unions
Management Board
(including Labour
Relation Board)
Shareholder
Manage
Company
Own
Japanese Model
This model is also called as the business network model, usually
shareholders are banks/financial institutions,
shareholders, corporate with cross-shareholding.
large
family
Supervisory Board
(including President)
Ratifies the Presidents
decision
Provides managers,
monitors and acts in
emergencies
Provides
manager
s
President
Shareholders
Main bank
Consults
Executive Management
(Primarily Board of Directors)
Managers
Own
Provides Loan
Company
Owns
Indian model
The model of corporate governances found in India is a mix of the
Anglo-American and German models. This is because in India, there
are three types of Corporation viz. private companies, public
companies and public sectors undertakings (which includes statutory
companies, government companies, banks and other kinds of
financial institutions).
Each of these corporation have a distinct pattern of shareholding.
For e.g. In case of companies, the promoter and his family have
almost complete control over the company. They depend less on
outside equity capital. Hence in private companies the German
model of corporate governance is followed.
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