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Nothing so concentrates the mind as an urgent and complex problem.
Frederick G Hilmer, Strictly Boardroom: Improving Governance to Enhance Company Performance (Hilmer Report (1993))
Introduction
In Chapter 11 we discussed corporate governance in the US, the UK, New Zealand, Canada, South Africa and India. They are some of the major traditional Anglo-American corporate governance jurisdictions. There are among them some fundamental differences in approach. In this chapter the focus is on corporate governance developments in countries where the two-tier board system is used. The number of EU member states with different corporate law systems makes corporate governance harmonisation quite difficult, but also leads to very interesting and dynamic discussion within the EU. The OECD Principles cover board structures. Germany has a two-tier board structure with employee representatives forming part of the supervisory board. Elements of the German corporate governance model influenced the original Japanese corporate governance model, but Anglo-American influence emerged after World War II. China has a unique corporate governance model because Chinese corporations were traditionally state-owned and many major corporations are still either state-owned or statecontrolled. Nevertheless, elements of both the German model and the Anglo-American model, especially as far as independent, non-executive directors for listed companies are concerned, have influenced the Chinese corporate governance model. Indonesia also has a two-tier board model, originally based on the Dutch model, but is now developing its own corporate governance principles based on international best practices. Indonesia is of course important for Australia, because of its close proximity and the potential for expanding economic and commercial ties between the countries, especially in light of the extensive ongoing negotiations regarding the Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA).
European Union (EU)
Enhancing corporate governance
The European Commission (EC) represents the interests of the EU as a whole. It proposes new legislation to the European Parliament and the Council of the European Union, and it ensures that EU law is correctly applied by member countries.