Nobody downloaded yet

Corporate Governance: Convergence towards Anglo-American Model - Essay Example

Comments (0) Cite this document
Corporate Governance: Convergence towards Anglo-American Model Table of Contents Table of Contents 2 Introduction 3 Convergence of Corporate Governance 4 Conclusion 6 References 7 Introduction This project is a critical analysis of corporate governance systems if they are actually converging towards the Anglo-American model…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.5% of users find it useful
Corporate Governance: Convergence towards Anglo-American Model
Read TextPreview

Extract of sample "Corporate Governance: Convergence towards Anglo-American Model"

Download file to see previous pages The underlying assumption of Anglo-Saxon model of corporate governance (practiced by U.S., UK, and Canada) is that the board should be structured to consist of outside and independent directors so as to minimize agency costs. Therefore in this model a single board includes executive directors who are in senior management positions and independent directors who not the employees of the organization. Overall the Anglo-Saxon model views an organization as series of contracts with the stakeholders which control everyone’s self-interest. Shareholders monitor the performance of the managers who are supposed to act in the interest of shareholders. The role of regulation is enhanced in such governance structure because of the requirement of fair and transparent disclosures by the organization. In contrast to Anglo-Saxon model another model of corporate governance is Continental European. While the former is characterized by dispersed ownership, equity, corporate control and flexible labor markets the latter is a mix of large shareholding pattern, debt financing, weak corporate control and rigid labor markets (Aguilera & Jackson, 2003, p.447). This project analyzes whether the corporate governance practices are converging towards the Anglo-Saxon model. ...
in major OECD countries that it might be the result of capital markets’ globalization such as issue of ADRs and GDRs, integration of markets, rise of foreign ownership, international competition, and emergence of new financial intermediaries (Nestor & Thompson, 1999, p.2). Collier and Zaman examined the development of the concept of audit committee in Europe and found that such a concept was rare before the 1990s and there was an increasing interest and recommendation that the audit committee must be formed. These recommendations are in line with the Anglo-Saxon concept of audit committee and have strengthened over time. Other examples of convergence are the discussions over director independence and financial expertise of board members (Collier & Zaman, 2005, p.23). The rise of foreign and portfolio investment, increasing intra-organizational dynamics such as foreign ownership and cross-border investments in the form of mergers, acquisitions and alliances have also led to the changes in corporate governance. Those firms that expand into global markets prefer to use equity rather than cash to acquire other firms and if the investment is in U.S. they are required to adopt corporate governance measures the investors are comfortable with. In the international capital markets there may not be sufficient investment flows for the firms which seems to have suboptimal governance practices which becomes a disadvantage to the home country of that firm. Overall the convergence of corporate governance practices is driven by: Increasing international financial capital flows that provided liquid capital markets to the companies and countries which meet requirements in international corporate governance standards. Impact of regional stock exchanges such as NYSE, London Stock ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Corporate Governance: Convergence towards Anglo-American Model Essay”, n.d.)
Retrieved de
(Corporate Governance: Convergence towards Anglo-American Model Essay)
“Corporate Governance: Convergence towards Anglo-American Model Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Corporate Governance: Convergence towards Anglo-American Model

Corporate Governance

...Task Corporate Governance Introduction For quite some time, businesses or firms have been practicing merging or simply acquiring other businesses. This is achieved by having the acquiring company maintain its name while the other company’s name is eliminated. Likewise, the two companies have to set rules of engagement that will ensure that they both operate in a manner that serves both of them well without any unfairness. The rules may be touching on both the firms themselves or their customers. This may be because of taking over of one company by another, buying out of one company by another or simply taking over another company. This is done with the main of financial gains or even avoiding making...
4 Pages(1000 words)Essay

Corporate governance

...? CORPORATE GOVERNANCE …………………. and Number …………….. …………. Words- 759 Corporate Governance The way companies are governed determines their success and the role they may play in the economy as well. Companies in recent years started giving greater emphasis on effective governance with a view to ensure competitive position, attract sufficient capital, guarantee sustainability, and combat corruptions. Corporate governance practices are associated with the development of financial markets, because higher level of governance in most countries are related to larger securities markets and lower...
3 Pages(750 words)Essay

Corporate Governance

...and responsibilities of the board, firm’s integrity and ethical behaviour, and concerns of disclosure and transparency. The corporate governance practices are largely different across the globe. The Continental Europe’s multi-stakeholder model gives first priority to the interests of workers, customers, managers, and suppliers whereas the Anglo-American corporate governance model mainly recognises the interests of shareholders (Vasilescu, 2008). Continental European countries like Germany and Holland possess two-tiered Board of Directors with intent to improve their corporate...
6 Pages(1500 words)Coursework

Corporate Governance

...? Corporate Governance of the of the Corporate Governance Q. Enron, Worldcom and Parmalat have generated immense interest in the study of corporate governance and in identifying how board actions can be monitored more effectively. Discuss one way in which you would improve the current scenario in regard to corporate governance. Introduction The corporate world is full of stories and events- some good and some bad, some which make the news and some which never see the light of day. Competition, personal greed, pressure from stakeholders and other sources are some reasons why business...
6 Pages(1500 words)Coursework

Anglo American Plc report dividing net income by total assets. The reason I selected this ratio is because it shows how effective a company has been at generating profits from its assets. The efficiency of the company is an important aspect of the operations to measure. Anglo American achieved a return on equity (ROE) in 2012 of -1.4%. This metric measures the extent to which financial leverage is working towards benefiting the company. The formula to calculate return on equity is net income divided by total equity. ROE was used in this analysis because this metric demonstrates the ability of the firm to generate income from its equity. The debt ratio of the company is calculated dividing total debt by total...
7 Pages(1750 words)Essay


...issues are highly topical. Up to now, there seems to be no generally applicable model as far as corporate governance is concerned. Many corporations work within the boundaries set out by national regulations and laws, as well as the shareholders’ expectations and economic goals. However, some convergence has been identified internationally with regard to corporate governance. This has mainly been due to the standards set by capital markets and international investors. Moreover, initiatives by OECD and World Bank have greatly helped in providing an analytical and theoretical framework with regard to...
10 Pages(2500 words)Essay

Anglo American

...tackling the HIV/AIDS epidemic in South Africa. Anglo-American is an international organization with roots in South Africa and as a multinational company is one of the largest employers in the country. Today, Anglo-American has 80,000 employees nation-wide and has been significantly affected by the global AIDS epidemic. The global HIV/AIDS outbreak began in the 1980s and Anglo-American was one of the first multinational corporations to understand and attempt to combat the ramifications of this insidious disease. Accordingly, South Africa remains the country with one of the highest infection rates in the world and...
3 Pages(750 words)Essay

Corporate governance

..., the firms are not only motivated by financial benefits but play wider roles in the development of the society as a whole. Various stakeholders ensure that the business is having positive impact on the wider imperatives of social causes like environment, better HR practices, effective CSR practices etc. The analysis of stakeholders also helps the firm to proactively support the community welfare and at the same time, meet the changing preferences of the customers, thereby significantly impacting it productive outcome and improving its image and credibility amongst the stakeholders. Answer 3 The corporate governance gatekeepers are people who are in position to influence the decisions and activities of...
2 Pages(500 words)Essay

Corporate Governance

...remaining nations that represented 15 percent of global population and were characterized as an open-access society (North, Wallis and Weingast, 2008). Another model that can be evaluated with respect of nations is the German Model. It is also known as two-beard model and is followed by Germany. Co-determination among employees is the major focus among the management and corporate governance departments across the German organizations. The stock market is concentrated and the shareholdings trends are concentrated. Further, creditor and banks dominate the governance policies of German organizations. Thus, the corporate...
12 Pages(3250 words)Essay

Is there global convergence in corporate governance and why

...that the countries that follow a dispersed ownership can easily conduct business activities among themselves. This suggests that the countries are eventually trying to converge in to a commonly followed ownership models. Paul (2005) has pointed that the corporate governance practices in the light of accounting practices. He stated that accounting may be termed as a language of business. Therefore, if the firms commence their business activities by using a common language then it will be easier for them to make better communication and avoid any ambiguity. Therefore developing a set of international accounting standards that will be followed by the multinational firms,...
5 Pages(1250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Corporate Governance: Convergence towards Anglo-American Model for FREE!

Contact Us