Corporate Governance and Managerial Reform in Japan
D. Hugh Whittaker and Simon Deakin
Abstract
The chapters in this book address the state of Japanese corporate governance and managerial practice at a critical moment. They are based on detailed and intensive fieldwork in large Japanese companies and interviews with investors, civil servants, and policy makers in the period following the adoption of significant corporate law reforms in the early 2000s up to the months just before the global financial crisis of 2008. At the start of the decade, the time seemed right for Japan to move to a shareholder value‐driven, “Anglo‐American” system of corporate governance. Instead, an adjustment and ... More
The chapters in this book address the state of Japanese corporate governance and managerial practice at a critical moment. They are based on detailed and intensive fieldwork in large Japanese companies and interviews with investors, civil servants, and policy makers in the period following the adoption of significant corporate law reforms in the early 2000s up to the months just before the global financial crisis of 2008. At the start of the decade, the time seemed right for Japan to move to a shareholder value‐driven, “Anglo‐American” system of corporate governance. Instead, an adjustment and renewal of the postwar model of the large Japanese corporation has taken place. Japanese managers have adapted to and reshaped corporate governance norms, using them to reform internal decision‐making structures. The board's role is seen in terms of strategic planning rather than monitoring, and external directors are viewed as advisers, not as representatives of the shareholders. Companies have responded to the threat of hostile takeovers by putting poison pills in place and have rebuffed hedge fund activists' demands for higher dividends and share buybacks. Although shareholder influence is more extensive than it was, central aspects of the Japanese “community firm” ‐ in particular, managerial autonomy and a commitment to stable or “lifetime” employment for core of employees ‐ largely remain in place. The Japanese experience suggests that there are limits to the global convergence of company law systems, and that the widespread association of Anglo‐American practices with the “modernization” of corporate governance may have been misplaced.
Keywords:
Japan,
corporate governance,
shareholder value,
Anglo‐American model,
law reform,
independent directors,
takeovers,
poison pills,
hedge fund activism,
community firm,
lifetime employment,
convergence,
modernization,
global financial crisis
Bibliographic Information
Print publication date: 2009 |
Print ISBN-13: 9780199563630 |
Published to Oxford Scholarship Online: February 2010 |
DOI:10.1093/acprof:oso/9780199563630.001.0001 |
Authors
Affiliations are at time of print publication.
D. Hugh Whittaker, editor
Professor, University of Auckland Business School
Author Webpage
Simon Deakin, editor
Professor of Law, Faculty of Law and Centre for Business Research, University of Cambridge
Author Webpage
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