Compare The Us And The Uk Model Of Corporate Governance
Corporate Governance: A European …show more content…
was established as legislation and is much less flexible. Germany mandated a two tiered board structure that clearly separates executive leadership functions from the supervisory functions. As the German system emphasizes on the preservation of jobs, labor representatives have a strong influence on the boards and are granted a stable 50% of seats for large companies (listed or < 2000 employees). Also banks and insurance companies have historically more presence in the board of German corporations due to the complicated credit structures after the German unification. Until now offering seats to the house bank is a custom that is seen to ensure corporation and control over the reasonability of businesses operations/ investments. Processes in the German system are defined or need to be defined mandatorily by the …show more content…
Countries that have a lively equity market are seen to be more likely to follow a shareholder approach as countries that have strong depth markets.
At European level, the European Commission has to consider the best method to align the member states regulation. In October 2004, a "European Corporate Governance Forum” has been set up, which aims to promote the convergence of national corporate governance codes and advise the Commission.
In April 2011, the Commission presented the Green Paper “European Corporate Governance Framework” and hereby various innovations, particularly in the area of shareholder participation and the appointment of directors with the goal of reducing the short-term thinking of the share-holders on one hand and on the other hand revolutionize the structure of the Board of Directors with regard to the introduction of a quota for women and other diversity measures.
The Commission's proposals are controversial among experts. In particular, the inclusion of a diversity clause in the Code is , in the opinion of many experts, a violation of the principle of subsidiarity, because the Commission is heavily intruding member state structures, for which there is no basis for