U.s. Corporate Governance System

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Executive Compensation The main objective of U.S. corporate governance system is maximization of shareholders value, thus executive compensation in U.S. are based on nature of the job performed and is linked to performance incentives such as bonuses or stock ownership. On the other hand, Japan and France corporate governance system objective lies on the mutual benefits of stakeholders, therefore their compensation is dependent on the achievements of the corporate overall objectives. Although all three countries uses different governance system, all utilize the same performance compensation format. Employees Stocks Options report stated that in 2000, 86% of US employers offered stock options to employees besides 19% of all employees were…show more content…
For France, the corporate governance is much more influenced by different stakeholders because they exert a strong power, it is a fact of life. When they disagree, employees go easily on strike, suppliers can interrupt a production and at the same time there is the growing pressure of foreign investment to attract. It all hinges on the question whether this kind of corporate governance can find a balance. In Japan corporate ownership is typically concentrated among a stable network of strategically oriented banks and other industrial firms, Corporate governance in Japan is axed on stakeholders such as is done in France but we can spot differences between these two countries. The main reason of that is the historical state-ownership of the companies and the family business that are very developed in this country. Japan has recognized the idea of stakeholders in their codes and principles (Cheung and Chan, 2004). The presence of banks as majority shareholders in most of the company in Japan can explain some of differences between France in Japan. The banks are using brief informal meetings to bring their ideas and ask questions to executive power of the company and let them a lot of liberty to act. Also the nationalism and state-ownership of the company allow them to focus on stakeholders as the decisions of the company are taken when and only when all stakeholders accept (Masaru YOSHIMORI,1998). Plus
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