Corporate Governance in Germany, USA, Switzerland and France

Running head: CORPORATE GOVERNNACE
Corporate Governance
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNNACE
Companies operate in different spheres as a result of which they operate in different
cultural, social and legal environments. This has resulted in companies having their own
corporate governance that regulates their operations (Kraakman and Hansmann 2017). It is
difficult to state that there is a system of corporate governance which is supreme and the others
are inferior. In this discussion, four countries have been selected to compare the corporate
governance they follow. Corporate Governance therefore, will be studied in four countries,
Germany, United States of America, Switzerland and France. These countries follow different
models of corporate governance and they also have employed different committees to help
narrow the differences down. Corporate Governance is defined as the methods that are applied
by suppliers of finance to corporations are assured that they will get a return on the investments
that make (Tricker and Tricker 2015). The stakeholders have made an investment in the
company, unlike the stakeholders. The shareholders will lose their money if the firm runs into
financial difficulties, whereas the stakeholders will not face the trouble. This is a flawed logic
because with the advent of corporate scandals, there needs to be change in the managerial
attitudes the shareholders face (Allen 2017). Though there is enough emphasis on the roles the
shareholders, the roles played by the stakeholders are ignored. The bureaucratic elites across the
corporate sphere endorse the shareholder based corporate governance without backing it with
any cogent and strong evidence of superiority. The capital-market based system is considered
superior to the stakeholder based system of corporate governance. Corporate governance is the
process of controlling and directing the management of the companies by directors (McCahery,
Sautner and Starks 2016). The directors help in understanding the effectiveness of their policies
and help in developing different forms of corporate governance.

2CORPORATE GOVERNNACE
German share companies as well as US listed companies use the one tier and two-tier
model which is based on the number of members on the board. The one tier model is the sole
board model whereas the two tier model works with the management and the supervisory board
helping in monitoring the executive functions of the company. Germany has adopted the two tier
model and US has adopted the one tier model. Switzerland has a flexible take on corporate
governance and chooses any model of Corporate Governance which the board deems feed. To
understand the dynamic structure of corporate governance, it is essential to know that all the
countries need to implement dynamism and accountability (Dimopoulos and Wagner 2016).
Therefore, corporate governance differs from country to country and it depends on the nature of
the company and the environment it is functioning it. The ultimate aim of corporate governance
is to ensure that corporate function freely without any fear of interference and litigation.
Different models of corporate governance work towards the ultimate goal of reaching the pre-
defined standards and therefore no model can be placed at a higher pedestal than the others. The
corporate governance should be aimed at monitoring the different roles that the board is playing
under the framework and how they are adopting the model of corporate governance to improve
the functions and performance of a company.
Answer 2
The question is whether corporate governance systems are converging or there are local factors
which indicate that there is significant difference in the corporate governance structure. The
moot question is whether the coming together of corporate governance systems will make one
system best and stand out from others. The problem with corporate government system
becoming persistently different from others is that it becomes very difficult to imitate a system of
corporate governance. If aspects of one corporate governance system are transferred to another