ABSTRACT
This chapter focuses on the basic legal framework of two competing models of corporate governance. Corporate governance is seen as a combination of various interest groups whose goals have to be co-ordinated in the national interest. The chapter compares two opposing models of corporate governance: the Anglo-American and the European model, and analyses how different legal traditions and experience have influenced the manner in which the model has been designed and operates. The two-board model worked well, but demonstrates significant weaknesses in a time of harsh international competition. Regulation has been traditionally seen as the American way of dealing with market failures, in contrast to the European model of the public provision of goods through public enterprises. In the European model, which favours large institutional investors and banks as important players, an important role is reserved for the employees.
