2. • Corporate governance systems vary around the world. This
because in some cases, corporate governance focuses on link
between a shareholder and company, some on formal board
structures and board practices and yet others on social
responsibilities of corporations
• There is no one model of corporate governance which is
universally acceptable as each model has its own advantages
and disadvantages.
4. 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 board usually consist of executive directors and few
independent directors. The board often has limited ownership
stakes in the company.
5. • The shareholders appoint directors who in turn appoint the
managers to manage the business. Thus there is separation of
ownership and control.
• This system (model) relies on effective communication between
shareholders, board and management with all important decisions
taken after getting approval of shareholders (by voting).
6. FEATURES OF ANGLO-AMERICAN
MODEL
• Ownership of shares is distributed.
• Banks only slightly engage in the operations of the company.
• Capital is raised on large and liquid capital markets.
• Internal supervisory authority is the Board of directors.
• Market is an active mechanism of control over the corporation.
• Measure of success is the share price and dividend.
• Capital markets are characterized by high transparency.