Corporate Governance Structure in Japan - Form and reality

Abstract

The last decade has witnessed a growing debate over corporate governance issues in a number of countries. The debate developed from Anglo-Saxon countries, such as the UK and US, where dispersed share ownership and thriving takeover markets are evident with financial systems referred to by Zysman (1983) as market based. However, the debate now includes countries with credit-based financial systems (Zysman, 1983), such as Germany and Japan, which are characterised by intercompany shareholdings, intercompany directorships and often substantial bank involvement. A question of considerable importance is whether the two systems of corporate governance will converge over time, particularly in the context of increasing globalisation of trade. To contribute to this debate, this paper focuses on corporate governance in Japan, an issue that has been debated with great interest in Japan by businessmen, academia, critics, government, consumers and even the accountants!