📊 The Anglo-Saxon Model is a market-based, shareholder-centric corporate governance system primarily followed in the United States, United Kingdom, Canada, and Australia. It is grounded in Anglo-American common law traditions and focuses on maximizing shareholder value through legal protections and market mechanisms.

⚖️ It developed in capitalist economies where there is a separation between ownership and control, allowing professionals (managers) to run companies on behalf of dispersed shareholders.

🔹 Historical Background and Development

📚 Developed by:
No single inventor. It evolved naturally over time from legal, economic, and institutional developments in Anglo-American economies.

👤 Influenced by:

• 🧠 Adam Smith (18th century): Highlighted the tension between managers and owners.

• 📘 Berle & Means (1932): The Modern Corporation and Private Property—explained the separation of ownership and control.

• 📊 Agency Theory (1976) by Jensen & Meckling: Explored the conflict of interest between principals (shareholders) and agents (managers).

📈 Modernization:
In the 1980s–1990s, global financial markets and corporate scandals led to further formalization of governance practices.

🔹 Order of Authority in the Anglo-Saxon Model

Here’s the hierarchy of power and accountability in this model:

1️⃣ 🏛️ Shareholders (Top Authority)

• Role: Owners of the company.

• Powers:

  • Elect the Board of Directors.

  • Vote on major decisions (e.g. mergers, director appointments).

• Accountability: None—they are the principal stakeholders.

• 📌 Goal: Profit and return on investment.

2️⃣ 🧑‍⚖️ Board of Directors

• Role: Strategic oversight on behalf of shareholders.

• Powers:

  • Hire/fire executives.

  • Set broad policy and approve major decisions.

• Accountability: Directly to Shareholders.

• ✅ Includes both executive and independent non-executive directors.

3️⃣ 👔 Managers (Executive Management)

• Role: Run the company day-to-day.

• Powers:

  • Operational decision-making.

  • Implement strategy set by the board.

• Accountability: To the Board of Directors.

4️⃣ 👨‍💼 Employees

• Role: Carry out the company’s tasks and operations.

• Powers:

  • Limited to their job functions.

• Accountability: To Managers.

• ❌ No direct role in corporate governance.

5️⃣ 🤝 Trade Unions

• Role: Advocate for employee rights (pay, safety, working conditions).

• Powers:

  • External influence through negotiation or industrial action.

• Accountability: Represent Employees, not part of the corporate governance structure.

• ❌ Not formally involved in governance decisions.

🔹 Key Principles and Characteristics

🔹 Strengths & Weaknesses

✅ Strengths

• Strong protection for investors.

• Transparency through disclosure laws.

• Market pressures promote efficiency.

❌ Weaknesses

• Emphasis on short-term profits.

• Weak internal control due to dispersed ownership.

• High executive compensation, sometimes misaligned with performance.