Corporate governance is a set of rules and structures that regulate the business operations. It entails the accountability of the board of directors and top managers of a company in avoiding conflicts between shareholders and management, encouraging transparent communication, and ensuring compliance with laws and regulations. It also promotes fairness between people who are involved in the company and helps it reach its goals. It is crucial to be aware of the various types of corporate governance to select the most appropriate one for your business.

Shareholders own a corporation and have rights, such as the right to vote on matters and to receive information that relates to their investment decisions and voting decisions. As the shareholders, they are entitled to expect managers and boards to be long-term stewards to their investments. Shareholders also demand a high level of corporate transparency.

There are several different models of corporate governance, including the Anglo-US model and the German model, and the Japanese model. Each model has a distinct goal, and each model manages business risk differently. There are many different corporate governance models, as well as national variations.

The continental model is a two-group control system. The management board consists of company insiders, like executives. The supervisory board consists of outsiders like workers’ union representatives and stockholders. The model is well-known for its focus on national and government interests and the company’s obligation to serve society and contribute to it.