Corporate Governance Models Quiz

In the Anglo-US model of corporate governance, what is the focus of decision-making?

Who are elected by the shareholders to oversee the whole organization?

Which board in the German Model of corporate governance is responsible for appointing the members of the Management Board?

Which model of corporate governance emphasizes a collaborative relationship between companies, unions, and government?

What distinguishes shareholders from stakeholders in corporate governance?

What characterizes the Japanese model of corporate governance in terms of decision-making?

Corporate Governance Stakeholders

Shareholders have ownership and elect the Board of Directors to oversee the organization
Stakeholders include customers and shareholders, but not all stakeholders are shareholders
Management is responsible for managing employees to work efficiently and productively
Regulatory bodies ensure compliance with laws and regulations

Models of Corporate Governance

Anglo-US Model

Focuses on market shares and profit
Decision-making is decentralized
High-level of compensation for executives
Limited government intervention
Key players: management, directors, and shareholders (corporate governance triangle)

German Model

Emphasizes stakeholder profit and long-term sustainability
Decision-making involves management, employees, and government
Skills-dependent regarding employees
Emphasizes employee rights and benefits
Collaborative approach between companies and government
Two boards with separate members: Management Board ("Vorstand") and Supervisory Board ("Aufsichtsrat")
Stringent disclosure requirements

Note

Japanese Model not discussed in this text

Test your knowledge on the different key players in corporate governance, including the board of directors, shareholders, stakeholders, management, and regulatory bodies. Understand the distinction between shareholders and stakeholders and learn about the various models of corporate governance from developed capital markets.