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The four models of corporate governance as outlined by Letza et al - Essay Example
Author : maximodavis
Finance & Accounting
Pages 11 (2761 words)
Introduction Letza et al (2004 p242) undertake a critical analysis of the debates and theories of corporate governance. They identify that the fundamental discussions on the concept of corporate governance in organisations are centred on the two main perspectives that make up the basis of corporate governance: shareholder perspective and stakeholder perspective…
Letza et al's journal was based on an extensive survey and critical review of the different theories and concepts that exist in corporate governance. Based on this comprehensive study, they identified four main approaches of perceiving corporate governance. This include: 1. Principal/Agent or Finance Model. 2. The Mypoic Market Model 3. Abuse of Executive Power Model and 4. Stakeholder Model Each of these models of corporate governance provide the basis for the perception of the importance and significance of corporate governance in organisations. Although each of them carry different merits, none of them seem to be universally accepted. This paper examines the four models of corporate governance as outlined by Letza et al (2004). The paper will undertake an analysis of the key features of each of the model. The paper will compare and contrast the approaches for each of the models and assess the future survivability of each of the concepts Corporate Governance Corporate governance refers to the ways that businesses are ran (Johnson, Scholes and Whittington, 2006). Corporate governance is about how the top level managers charged with stewardship roles in the organisation carry out the task of safeguarding assets and meeting the core vision and mission of the organisation. ...