Corporate governance is the set of rules and structures that govern the functioning of companies. It entails the accountability of the board of directors as well as the top managers of a company to avoid conflicts between management and shareholders as well as promoting open and transparent communication and ensuring compliance with laws and regulations. It also promotes fairness between people who are involved in the company and helps it attain its goals. It is essential to understand the various forms of corporate governance in order to choose the appropriate one for your business.
Shareholders are the owners of a corporation They have the right to vote on issues as well as receiving information pertinent to their investment and voting decisions. As the shareholders, they are entitled to expect boards and managers to act as long-term stewards of their investments. Shareholders also expect a high degree of transparency from corporate entities.
There are a myriad of models of corporate management which include the Anglo/US model, as well as the German and Japanese models. Each model has its own emphasis, and each handles business risk in a different manner. There are a variety of corporate governance models and also national variations.
The continental model has two groups who control the company. The management board is comprised by company insiders such as executives, while the supervisory board is comprised of outsiders such stockholders and union representatives. The model my link is famous for its emphasis on national and government interests, and emphasizes the company’s obligation to contribute to society and function as a public service organization.
