(b)Briefly describe the governance structure of Crystal Cars and why shareholders may have left the merged organisation. (10 marks)The merger between Crystal Cars, the US auto giant, and Mannermenz, the German luxury car king showed sound industrial logic. The combined business could compete more effectively in an increasingly global marketplace. The challenge was how to effectively blend the rigid, technically sophisticated German culture with the American mass market orientation and flair. Early indicators were not positive. The combined company was incorporated under German law and therefore based in Germany. On attending the first board meeting, Jim Black, the Crystal CEO, and largest shareholder noted the inclusion of employee representatives as board members. He also found it difficult to understand why the three board members representing German banks (majority Mannermenz shareholders) discussed long-term, stable development and corporate citizenship. Mr Black, an 80-year-old billionaire, demanded the company focus on maximising immediate shareholder returns since shareholders would expect this in return for supporting the merger. It became evident that the German banks were very influential and involved in business decision- making, offering access to low-cost finance in return. Mr Black was informed that this was common in the German model of capitalism. Shortly after the first board meeting, Crystal's domestic shareholders received the company's first annual report. The disclosure was at an absolute minimum and far below that expected in the US. Amongst other missing items, there was no detail on directors' remuneration. Remuneration was itself a contentious issue with Crystal directors receiving 10 times more than their German counterparts. The bad news for the US directors was that stock options are not recognised under German law. This issue has still to be resolved. US shareholders also missed the opportunity to vote on company resolutions at the AGM since electronic voting was not allowed. When the merger was completed approximately 44% of the company was in US hands. Six months later the US shareholding had fallen to below25%