Corporate Governance Structures

Corporate Governance Structures

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to the analysis of governance structures as described in “Board Models in Europe”. Within a society, corporate governance is defined as a set of rules (laws, regulations, etc.) that govern the management of the company. Corporate governance also includes the relationships among the various players involved (the stakeholders, i.e. the holder of any interest in the company) and the objectives for which the company is managed. The main players are the shareholders (shareholders), the Board of Directors (board of directors) and management. The interest in the methods of corporate governance has grown a lot in recent times. In this paper, the author will identify the key elements of governance structures (i.e., the sharing of power and control between shareholders, directors and other management) reviewed in Board Models in Europe.

Discussion

The term corporate governance refers to the various areas of business life. It can be described as:

the processes by which companies are directed and controlled,

activities that will encourage companies to follow the codes (guidelines on corporate governance)

a field of economics that studies the problems arising from the separation of ownership from control

More generally, corporate governance embraces a series of rules, relationships, processes and business systems, by which authority is exercised and controlled. Relationships between parties include all those involved in society, as the owners, managers, administrators, the regulatory authorities, as well as employees and society at large. The processes and systems have to deal with the mechanisms of delegation of authority, performance measurement, security, reporting and accounting. In this way, the structure of corporate governance expresses the rules and processes by which decisions are made in a company. It also provides the structure through which the company objectives are decided, and the means for achieving and measuring results.

As identified in the article “Board Models in Europe”. There has been a growing debate on the issue of proficient internal management control in Europe since the implementation of Dutch Company in 1602. In recent times, the European Authorities have focused on introducing specialized and well defined laws and regulations for companies listed on the stock exchange. This development in the rules and policies indicate an increase in the junction of internal control among listed companies in Europe.

In 2003, certain amendments were made in the code of corporate governance in United Kingdom and France. These revisions of principles have strengthened the position of independent directors on one-tier boards in Europe. Furthermore, some other adjustments were also made in the two-tier model. According to the revised model, the positions and the presence of chairman and CEO were separated. In the German two-tier model, the role of the supervisory board has been strengthened by the new codes of Corporate Governance. This new German code enabled the authority to take in to account the effect of one-tier model as well. The powers of the Board are, therefore, all the powers which under the provisions ...