Corporate Governance in Three Economies Germany, Japan and the United States

1484 WordsJan 24, 20146 Pages
Corporate Governance in Three Economies: Germany, Japan and the United States 1. Strategy, Governance Concepts and Business Terminology: 1. Corporate governance 6. Legal structure 11. Crossholding 2. meeting of shareholders 7. Outstanding share 12. Limited liability companies 3. Long-term financing 8. Supervisory board 13. shareownership 4. Bond and equity market 9. Pension funds 14. Direct and Indirect households 5. Board of directors 10. Management board 15. Inside and Outside directors 2. Strategy, Governance and Business Insights, and Lessons from the Case: The basic structure of corporate governance is that stakeholders select representatives, and representatives select management to…show more content…
Last, establish smooth relationship among various stakeholders (improving internal organization). In United States, the majority part in board of directors is constituted by outsiders. The shareholders elect the board of directors and the board of directors elects managers. Three decisions should be made. First, improve the monitory system of company management. Second, strengthen the roles of internal auditors. Third, make stable cooperation between employees and management. In the global view, leaders should first keep eyes on overcoming the agency problems and aligning managers’ interests with stockholders. Other factors that should be noticed are corporate takeover, internal controls, monitoring financial reports and so on. Leaders should balance the interests of stakeholders. They should also alter their corporate governance strategy according to the environment changes. 4. Recommendations: In Germany, to strengthen the management board, the company should first clarify the duties of management board. Then, a supervisory system should be carried out to detect the frauds of the management team. The company should also make performance-oriented pay of the managers by granting stock options easier. It may either buy back shares on the market. Or it may increase its share capital and create new stock on the condition that the stock options will mature and be exercised. To strengthen the supervisory board, the company should meet once a quarter and that
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