University of Leicester School of Management
Corporate Governance MN7036 Candidate: Supervisor: Catherine Casey
I. Summary
In terms of the board structure, there are two general models: unitary board and dual board. Unitary board system of corporate governance is mainly used in the UK and USA. According to Hermalin (1998), the unitary board is responsible for the shareholders' meeting, and it has both decision-making function and the supervision function. The board of directors, with several subcommittees, is composed of independent directors and executive directors. The independent directors can play an active role in the board of directors and supervise the executive directors. …show more content…
Senior managers have the autonomy in management, which is beneficial for operators to concentrate, and to ensure their passion for work and creativity so that they can do well in operation and improve company's performance. However, Weisbach, M. (1988) points out that unitary board system is short of the internal control system on the top management, which will inevitably lead to two intractable problems: the first one is the inadequate supervision and management of top managers. The supervisory control over the operators of a company is achieved mainly by electing people that shareholders trust to the board of directors, which is the most important and the only organization to supervise and control the manager of a company and his/her …show more content…
For example, supervisors in the dual board system always just plays a kind of decorative role to a great extent. Although the number of members of the board of supervisors is large, most of the supervisors are not good at the company's original business. Secondly, the supervisory board meeting's holding times is less, about four times every year, it is difficult to play their roles; Thirdly, as the banker or the representative of the bank, the supervisor is very busy with his or her work, and whether he or she could effectively exert the function of supervision when there are conflicts of interest; Fourthly, whether the credit investigation of the bank is real and whether the company fails to fully exert the efficiency because of having banks as the backers. Moreover, shareholders are manipulated in the hands of the controlling shareholder, which eventually derive the power struggle and confrontation between company controllers and
Corporate Governance MN7036 Candidate: Supervisor: Catherine Casey
I. Summary
In terms of the board structure, there are two general models: unitary board and dual board. Unitary board system of corporate governance is mainly used in the UK and USA. According to Hermalin (1998), the unitary board is responsible for the shareholders' meeting, and it has both decision-making function and the supervision function. The board of directors, with several subcommittees, is composed of independent directors and executive directors. The independent directors can play an active role in the board of directors and supervise the executive directors. …show more content…
Senior managers have the autonomy in management, which is beneficial for operators to concentrate, and to ensure their passion for work and creativity so that they can do well in operation and improve company's performance. However, Weisbach, M. (1988) points out that unitary board system is short of the internal control system on the top management, which will inevitably lead to two intractable problems: the first one is the inadequate supervision and management of top managers. The supervisory control over the operators of a company is achieved mainly by electing people that shareholders trust to the board of directors, which is the most important and the only organization to supervise and control the manager of a company and his/her …show more content…
For example, supervisors in the dual board system always just plays a kind of decorative role to a great extent. Although the number of members of the board of supervisors is large, most of the supervisors are not good at the company's original business. Secondly, the supervisory board meeting's holding times is less, about four times every year, it is difficult to play their roles; Thirdly, as the banker or the representative of the bank, the supervisor is very busy with his or her work, and whether he or she could effectively exert the function of supervision when there are conflicts of interest; Fourthly, whether the credit investigation of the bank is real and whether the company fails to fully exert the efficiency because of having banks as the backers. Moreover, shareholders are manipulated in the hands of the controlling shareholder, which eventually derive the power struggle and confrontation between company controllers and