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The Different Types of Corporate Governance

Corporate governance is a set of rules and structures that regulate the business operations. It entails the accountability of the board of directors and the senior managers of a business to avoid conflicts between shareholders and management as well as promoting open and transparent communication and ensuring compliance to the laws and regulations. It also promotes fairness among stakeholders and helps the company achieve its goals. It is essential to understand the various types of corporate governance in order to choose the best one for your company.

Shareholders have ownership of a corporation and have rights, such as the right to vote on matters and receive information that is relevant to their investment and voting decisions. They expect that managers and boards will serve as long-term stewards of their investments. Shareholders also demand a high level of transparency from corporate entities.

There are many different models of corporate management such as the Anglo/US model, the German and Japanese models. Each model has a different goal, and each model manages risks to business in a different way. In addition to the different models, there are also diverse national differences in corporate governance.

The continental model is a control system that has two groups. The management board is made up by insiders of the company, such as executives, whereas the supervisory board is composed of outsiders such as stockholders or union representatives. The model is well-known for its emphasis on national interest and government and the company’s obligation to serve society and contribute to its improvement.

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