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Corporate Governance Models
The document discusses various models of corporate governance, highlighting that no single model is universally accepted due to their unique advantages and disadvantages. It outlines the Anglo-American, German, and Japanese models and includes a specific reference to the Indian model, which blends elements from the first two models influenced by the country's corporate structure. Overall, corporate governance is described as the process by which organizations are managed, with varying focuses on shareholders, board structures, and corporate responsibilities.
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Corporate Governance Models
- 1. Department: HRM Models ofCorporate Governance By: Nikhil Shekhar Batch: 2016-18
- 2. Models of CorporateGovernance What is it about C.G? •The C.G 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. •However, basically, corporate governance is seen as the process by which organizations are run. •There is no one model of corporate governance which is universally acceptable as each model has its own advantages and disadvantages. Corporate Governanc e ANGLO- AMERICAN MODEL GERMAN MODEL JAPANESE MODEL Xavier Institute of Management Jabalpur 2
- 3. 3Xavier Institute ofManagement Jabalpur Anglo-American Model U.S.A, U.K, Canada, Australia and common wealth countries.
- 4. Xavier Institute ofManagement Jabalpur 4 Shareholders BOD Shareholders Officers/Managers Company Regulatory/ Legal System Creditors Elect Appoints & Supervises Monitor & RegulatesLies on Anglo-American Model
- 5. German Model Germany, Holland,France… Xavier Institute of Management Jabalpur 5
- 6. Xavier Institute ofManagement Jabalpur 6 Supervisory Board Management Board (Labour Relation Board) Company Employees & Labour Union Appoint 50% Appoints & Supervises Owns Manage Appoint 50% Shareholders German Model
- 7. Japanese Model A BusinessNetwork Model Xavier Institute of Management Jabalpur 7
- 8. Managers Consult Xavier Institute ofManagement Jabalpur 8 Supervisory Board (Including President) Executive Management (Primarily Board of Directors) Company Appoints Ratifies the President’s decision Owns President Shareholders Provides Loan Provides, Managers, monitors and acts in emergencies Main Bank Provides Managers Owns Japanese Model
- 9. Indian Model Collaboration ofAnglo-American & German Models • This mix is because in India, there are three types of corporations i.e. Private, Public Co. and Public Sectors undertakings (which includes statutory companies, government companies, banks and other kind of financial institutions). • Each of these corporation have a distinct pattern of shareholding. Xavier Institute of Management Jabalpur 9 In case of companies, the promoter and his family have almost complete control over the company. They depend less on outer equity capital. Hence in private companies the German Model of corporate governance is followed.
- 10. Xavier Institute ofManagement Jabalpur 10