Corporate Governance Reforms in Japan: Instilling the New Regime

Kostiantyn Ovsiannikov,Collins G Ntim

doi:10.1080/23311975.2017.1300993

Kostiantyn Ovsiannikov, Collins G Ntim

Open Access

https://doi.org/10.1080/23311975.2017.1300993

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Abstract

AbstractThis paper analyzes recent transformations in Japanese corporate governance within the context of the 2002 reform of the Japanese Commercial Code and the ensuing legislations. It is widely recognized that ongoing changes in Japanese corporate governance are aimed at incorporating key principles of Anglo-Saxon corporate law. However, this alone does not explain why, under the minimal role of market for corporate control and with predominantly insider-oriented boards, directors of Japanese stock-listed enterprises have become increasingly sensitive to indices reflecting their companies’ share value. The paper argues that this shift is caused by the newly emerging regime of veridiction. The latter, as the study indicates, is the normative discourse constituted on the basis of Japanese corporate governance enactments over the last two decades.

Highlights

During the last two decades, Japan has experienced lasting economic stagnation
This paper aims to offer a solution by referring to the statement of Morgan and Takahashi (2002, p. 170): “The institutional context for shareholder value discourse has to be created and in some cases engineered into existence.”
This study argues that the “regime of veridiction” theory of Michel Foucault is appropriate for conceptualizing the shareholder model that has so far been primarily evident in Japan as the discourse articulated from above

Summary

Introduction

During the last two decades, Japan has experienced lasting economic stagnation. It has been mainly rooted in an inadequate state response to the ever-growing influence of the market starting fromKostiantyn Ovsiannikov ABOUT THE AUTHORKostiantyn Ovsiannikov is a PhD candidate enrolled in the Doctoral Program in International and Advanced Japanese Studies at the University of Tsukuba, Japan. His research mainly deals with Japan’s corporate governance, as well as continuity and change in the Japanese political and economic institutions He is a member of the Association of Japanese Business Studies (AJBS) and the World Interdisciplinary Network for Institutional Research (WINIR). He currently works on the topic of corporate governance reforms in Japan, their possible conceptualization and implications. His study aims to address the gap in business research that employs analytical framework other than the dominant agency theory According to his opinion, Japan’s moderate and fragmentary implementation of shareholderoriented policies can provide a valuable lesson for other “coordinated market economies”, such as, for example, Germany, Austria and Sweden

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