Comparative analysis of development paths within the framework of the two-tier corporate governance model in Germany, Italy, and China

Abstract

This article aims to reveal the three trajectories of establishing the two-tier model and select Germany, Italy, and China to discuss the ontology of the two-tier model, its integration with other local models, and its development variants. This article compares the similarities and differences of the two-tier model in the organizational structures of three countries to show that there is institutional inertia or path dependence in the design of legal systems and rules on corporate governance. In the two-tier model, the management agency performs the corporate business, the supervisory agency supervises the corporate operations, and the relationship between the management agency and the supervisory agency is subtle and complex. Germany is the original user of the two-tier model. Italy introduced the two-tier model as an optional model in addition to the traditional model. China is learning from the world’s experience and establishing its own two-tier corporate structure based on its own conditions. As Buck and Shahrim (2005) mentioned, cultural traditions, historical development paths and models, the overall development level and maturity of the market economy, social legal awareness, and the improvement of the rule of law influence the corporate governance structure that the country chooses to adopt