Forum 6: Ownership and control Starting from Berle and Means (see the Opening case), some argue that the Anglo-American style separation of ownership and control is inevitable outcome in corporate governance for large firms

Ownership and Control

The Anglo-American model is used by the British and the Americans in their stock markets. Corporates use other models to determine the ownership and control of the business. The Americans and Britains mostly prefer the Anglo-American model because it is flexible and disseminated. The model gives more power to the board of directors and the shareholders of a corporation (Peng, 2017). The board of directors and the shareholders have more capabilities than the business managers because they tend to execute orders of the shareholders and the board of directors. The Anglo-American model is based on the orientation of the market. For the model to function effectively in the organization, it depends on the external systems. The interests of the firm should be focused on the shareholders. The interests of the shareholders matter the most in the firm. It is the most suitable model that can be used for large firms because it is more effective compared to the other models.

The system can enable the firm to withstand the liquidity of its capital market. Some people find the model effective, while others do not. I think the model is practical to use in large firms because large firms' management is complex. It is easy for large firms to increase their performance level by separating control and ownership through this model (Peng, 2017). It ensures that resources in the firm are utilized in the best way to maximize the interest of the shareholders. The business managers will focus on providing that the shareholders' resources are used in the most appropriate ways to achieve their goals. It also ensures there is a balance between the shareholders and the managers. The managers ensure that the business runs smoothly through their decisions because, at times, shareholders can harm the company.