Corporate Governance in Three Economies Germany, Japan and the United States
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 control the daily operation. But because of the differences of cultural and historical happenstance, the corporate governance structure varies across countries.
In Germany, company types include sole proprietorships, partnerships, cooperatives, and limited liability companies. The two kinds of limited liability companies are GmbH and AG. GmbH is a partnership with limited liability and does not issue shares, while AC issues shares. GmbHs usually have small company size but gain larger total sales. For large GmbHs and all AGs, Two-tier boards (management board and supervisory board) are used. Supervisory board is appointed by general meeting of the shareholders. For all GmbHs and AG with less than 2000 employees, the supervisory board includes 2/3 shareholders and 1/3 employees. But for AG with more than 2000 employees, the ratio is 1:1. Banks provide most of the long-term financing and take on equity stakes in order to monitor the firm. Crossholding is common and causes two firms to each have a representative of other firm on the supervisory board. Banks and other business firms are major players in German corporate governance.
In Japan, company types include commercial partnerships, limited partnerships, and limited companies.
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 control the daily operation. But because of the differences of cultural and historical happenstance, the corporate governance structure varies across countries.
In Germany, company types include sole proprietorships, partnerships, cooperatives, and limited liability companies. The two kinds of limited liability companies are GmbH and AG. GmbH is a partnership with limited liability and does not issue shares, while AC issues shares. GmbHs usually have small company size but gain larger total sales. For large GmbHs and all AGs, Two-tier boards (management board and supervisory board) are used. Supervisory board is appointed by general meeting of the shareholders. For all GmbHs and AG with less than 2000 employees, the supervisory board includes 2/3 shareholders and 1/3 employees. But for AG with more than 2000 employees, the ratio is 1:1. Banks provide most of the long-term financing and take on equity stakes in order to monitor the firm. Crossholding is common and causes two firms to each have a representative of other firm on the supervisory board. Banks and other business firms are major players in German corporate governance.
In Japan, company types include commercial partnerships, limited partnerships, and limited companies.