D. Hugh Whittaker and Simon Deakin (eds)
- Published in print:
- 2009
- Published Online:
- February 2010
- ISBN:
- 9780199563630
- eISBN:
- 9780191721359
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199563630.001.0001
- Subject:
- Business and Management, Corporate Governance and Accountability, HRM / IR
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 ...
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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.Less
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.
John Buchanan and Simon Deakin
- Published in print:
- 2009
- Published Online:
- February 2010
- ISBN:
- 9780199563630
- eISBN:
- 9780191721359
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199563630.003.0002
- Subject:
- Business and Management, Corporate Governance and Accountability, HRM / IR
This chapter presents an empirical analysis of the implementation of the “company with committees law” of 2002 that was aimed at expanding the role of independent directors. Most boards continue to ...
More
This chapter presents an empirical analysis of the implementation of the “company with committees law” of 2002 that was aimed at expanding the role of independent directors. Most boards continue to have a significant executive presence and external directors are treated as advisers and associates rather than as monitors of management or as agents of the shareholders. However, there has been an increase in external directors across all companies (not just those opting into the new law), and a clearer separation between monitoring and execution. Because the core of the “community firm” appears to remain intact, the chapter interprets these developments as a renewal of the postwar model, stressing elements of continuity along with the adaptability of the Japanese corporation in the face of external pressures. A similar conclusion is reached concerning the limited impact on managerial practice of growing shareholder engagement, including recent instances of hedge fund activism.Less
This chapter presents an empirical analysis of the implementation of the “company with committees law” of 2002 that was aimed at expanding the role of independent directors. Most boards continue to have a significant executive presence and external directors are treated as advisers and associates rather than as monitors of management or as agents of the shareholders. However, there has been an increase in external directors across all companies (not just those opting into the new law), and a clearer separation between monitoring and execution. Because the core of the “community firm” appears to remain intact, the chapter interprets these developments as a renewal of the postwar model, stressing elements of continuity along with the adaptability of the Japanese corporation in the face of external pressures. A similar conclusion is reached concerning the limited impact on managerial practice of growing shareholder engagement, including recent instances of hedge fund activism.
