Difference between anglo american model german model japanese model and indian model
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Anglo-American Model
Under the Anglo-American Model of corporate governance, the shareholder rights are recognised and given importance. They have the right to elect all the members of the Board and the Board directs the management of the company. Some of the features of this model are:
This is shareholder oriented model. It is also called Anglo-Saxon approach to corporate governance being the basis of corporate governance in Britain, Canada, America, Australia and Common Wealth Countries including India
Directors are rarely independent of management
Companies are run by professional managers who have negligible ownership stake. There is clear separation of ownership and management.
Institution investors like banks and mutual funds are portfolio investors. When they are not satisfied with the company’s performance they simple sell their shares in market and quit.
The disclosure norms are comprehensive and rules against the insider trading are tight
The small investors are protected and large investors are discouraged to take active role in corporate governance.
German Model
This is also called European Model. It is believed that workers are one of the key stakeholders in the company and they should have the right to participate in the management of the company. The corporate governance is carried out through two boards, therefore it is also known as two-tier board model. These two boards are:
Supervisory Board: The shareholders elect the members of Supervisory Board. Employees also elect their representative for Supervisory Board which are generally one-third or half of the Board.
Board of Management or Management Board: The Supervisory Board appoints and monitors the Management Board. The Supervisory Board has the right to dismiss the Management Board and re-constitute the same.
Under the Anglo-American Model of corporate governance, the shareholder rights are recognised and given importance. They have the right to elect all the members of the Board and the Board directs the management of the company. Some of the features of this model are:
This is shareholder oriented model. It is also called Anglo-Saxon approach to corporate governance being the basis of corporate governance in Britain, Canada, America, Australia and Common Wealth Countries including India
Directors are rarely independent of management
Companies are run by professional managers who have negligible ownership stake. There is clear separation of ownership and management.
Institution investors like banks and mutual funds are portfolio investors. When they are not satisfied with the company’s performance they simple sell their shares in market and quit.
The disclosure norms are comprehensive and rules against the insider trading are tight
The small investors are protected and large investors are discouraged to take active role in corporate governance.
German Model
This is also called European Model. It is believed that workers are one of the key stakeholders in the company and they should have the right to participate in the management of the company. The corporate governance is carried out through two boards, therefore it is also known as two-tier board model. These two boards are:
Supervisory Board: The shareholders elect the members of Supervisory Board. Employees also elect their representative for Supervisory Board which are generally one-third or half of the Board.
Board of Management or Management Board: The Supervisory Board appoints and monitors the Management Board. The Supervisory Board has the right to dismiss the Management Board and re-constitute the same.
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