Legal regulations for corporate governance in the United Kingdom and the Federal Republic of Germany and experiences for Vietnam

Abstract

Due to the rise of globalisation in world markets, corporate governance models have been more and more carefully examined. There currently exist the two dominant types of corporate governance which are the one-tier board and the two-tier board. Within Europe, the United Kingdom is a prominent country for the one-tier board system, consisting of executive and non-executive directors; on the other hand, Germany adopts the two-tier board system in which there is a clear separation between the management board and the supervisory board. While the one-tier board structure in the UK is largely known as the reflection of neo-liberal norms of shareholder primacy and free market capitalism, Germany takes a different approach with its two-tier board structure primarily emphasising the stakeholder’s rights and managerialism. This paper analyses the main features of the one-tier board system and the two-tier board system under the legal regulations of corporate governance in the UK and Germany, highlights the advantages and the asdisadvantages of each system and draws lessons learnt for corporate governance in Vietnam.