Certified Financial Management Specialist Practice Exam

In the Anglo-American Model, which model is currently the principal one in use?

1. Stewardship Model

2. Political Model

3. Shareholder Model

4. Management Model

The correct answer is: Shareholder Model

The principal model currently in use in the Anglo-American system is the Shareholder Model. This model emphasizes the importance of maximizing shareholder value as the primary goal of a corporation. In this framework, the interests of shareholders are prioritized, asserting that the main objective of a company should be to increase its profit margins and stock prices, thereby providing financial returns to its investors. This approach is rooted in the belief that when companies focus on maximizing shareholder wealth, it ultimately benefits the broader economy. This influence shapes corporate strategies, decision-making processes, and financial policies across many organizations operating in Anglo-American contexts. While there are other models like the Stewardship and Political models that focus on different stakeholder relationships and governance, they do not hold the same prominence within the Anglo-American framework as the Shareholder Model does. Understanding the key principles of the Shareholder Model is crucial for grasping corporate governance within this context, as it directly influences how companies operate and assess their performance.