Choose two countries with contrasting corporate governance systems. Analyse the strengths and weaknesses of these two systems  and explore why the differences in their corporate governance structures have arisen.
Theory and Practice – The Competition between Corporate Governance Systems
First, the corporate structures of an economy depend on the structures with which the economy started. Initial ownership structures have such an effect because they affect the identity of the structure that would be efficient for any given company and because they can give some parties both incentives and power to impede changes in them. Second, corporate rules, which affect ownership structures, will themselves depend on the corporate structures with which the economy started. Initial ownership structures can affect both the identity of the rules that would be efficient and the interest group politics that can determine which rules would actually be chosen. Our theory of path dependence sheds light on why the advanced economies, despite pressures to converge, vary in their ownership structures. It also provides a basis for why some important differences might persist. [L. A. Bebchuk and M. J. Roe, 1999]
Propelling this new inquiry into whether the Berle/Means corporation—with its famous “separation of ownership and control”–is the inevitable and efficient endpoint of economic evolution, or only the artefact of political forces and historical contingencies, is the unavoidable reality of increased global competition in both the product and capital markets. As a result, dispersed and concentrated ownership structures not only differ, but they may be forced to compete. Although scholars have debated the relative merits of these rival models for a decade or more, this prospect of an evolutionary competition–with its implication of a Darwinian “survival of the fittest” struggle– is very new. Ultimately, the issue thus posed is which system will dominate (and why): the stock market centered system of dispersed ownership first described by Berle and Means or the blockholder and cross-shareholding systems that now prevail across Europe and Asia. Of course, a clear winner does not necessarily have to emerge. The more one believes that political forces are likely to constrain and override purely economic forces, the more one is likely to expect a more muddled and contextual outcome. Thus, the current debate has two levels that can often become confused: (1) Which system of corporate governance is superior?; and (2) Which set of forces– economic or political– are likely to prove more powerful?
[J.C. Coffee Jr., 1999]