Corporate Governance In Japan Research Articles

Correlation of financial accounting and corporate governance from the perspective of Chinese and Japanese university students in Tokyo

The purpose of this study is to explore the perspectives of Japanese and Chinese university students who are taking up global management courses on financial education and corporate governance. It aims to examine how the students’ age, nationality, and sex are related to their financial knowledge and views on corporate governance practices. It is motivated by the gap in the literature on the moral and ethical aspects of financial education and corporate governance, as well as the cultural factors that influence corporate decisions. The study also seeks to understand the perceptions and expectations of future professionals and business leaders from different cultural backgrounds regarding financial accounting and corporate governance systems. It is based on a literature review, a survey and semi-structured interview of 44 students from one of the top-ranked private universities in Tokyo. The research uses descriptive statistics, correlation analysis, and regression analysis to analyze the data. The study expects to find significant differences between the students’ financial knowledge and corporate governance views according to their age, nationality, and sex. It also expects to find positive relationships between the students’ financial knowledge and their corporate governance views. It also seeks to contribute to the existing literature by providing insights into the perspectives of Japanese and Chinese university students on financial education and corporate governance. The result of the study informs policies, education programs, and corporate practices related to financial accounting and corporate governance in Japan, China, and potentially other countries as well.

Stakeholder engagement as a sustainable development strategy: Managerial entrenchment for cross‐shareholdings

AbstractWe analyze the effect of managerial entrenchment on firms' corporate social responsibility (CSR) activities. We use the cross‐shareholding ratio and the stable shareholders ratio, which characterize the Japanese corporate system, as proxy variables for managerial entrenchment. We choose two CSR/environmental, social, and corporate governance scores: those for vendors targeting only Japan and those for vendors targeting the entire world. The results show that increases in the cross‐shareholding and stable shareholder ratios decrease CSR activities. These results are consistent with the view that CSR activities are considered a costly investment for managers rather than a type of agency cost. Finally, we reveal that after the enactment of Japan's Corporate Governance Code in 2015, the cross‐shareholding and the stable shareholder ratios have not significantly affected CSR activities and that foreign institutional investors have promoted CSR activities.

Bangladesh’s Learning from Corporate Governance in Japan

Bangladesh’s Learning from Corporate Governance in Japan

Bangladesh's Learning from Corporate Governance in Japan

Bangladesh's Learning from Corporate Governance in Japan

New Japan’s Corporate Governance Code and its Scrutiny from the Perspective of 'Sustainable Growth of the Company and Improvement of Medium-to Long-Term Corporate Value' (Presentation Slides)

This is the presentation slide on the main points of New Japan's Corporate Governance Code (2021 Revision). It consists of the description on the background, transition, and scrutiny of the Code and scrutiny from the from the Perspective of 'Sustainable Growth of the Company and Improvement of Medium-to Long-Term Corporate Value'. This paper is based on my presentation at the seminar at the CUHK(Chinese University of Hongkong) held on 27th May . In the 2021 Code Revision, various directions were presented to promote sustainability and diversity, and to improve the function of the board of directors. However, from the point of improving the “earning power” that is the driving force for Japanese companies and improving their corporate value over the medium to long term, the Japan’s Corporate Governance Code have not provided enough principles or directions yet and needs support through practice and further review in the future

Corporate governance in Japan in the 1930s and its impact on financial reporting practice

ABSTRACT Japan’s financial reporting system during the 1930s is an essential analytical subject as it provides an indispensable opportunity for scholars to identify the determinants of financial reporting practice adopted in an unregulated disclosure setting. This study examines the claim that the number of items disclosed in the income statement produced by Japanese heavy chemical companies during this period was materially affected by the period’s national economic policy put in place to rationalise the sector through business combinations. To test this proposition, we conduct an ordered logit analysis using 1651 panel data sets consisting of income statements issued by 104 industrial companies available from the Integrated Database of Corporate Historical Materials provided by the Japan Digital Archives Center (J-DAC). Our evidence suggests the possibility that an inherent motivation existed on the part of the owner-managers in the heavy chemical industry to withhold performance information from the public as a consequence of the business combination movement promoted by the National Industrial Rationalization initiative. One possible explanation is the desire of the corporate managers to protect their dominant position from hostile takeovers by providing less-transparent information and thus amplifying the uncertainty associated with acquisitions.

Diversity in Japanese Companies’ Boardroom: Sign of Shifts in the Japanese Model or Corporate Governance Reform as a Fashion?

This paper discusses the gender diversity of the board in Japanese public companies. Its implications are analysed against the background of the recent reform of corporate governance in Japan. During the post-war period, the Japanese corporation has been the “insiders’ community”: the employees committed to a single company for almost throughout their career, and the board members were chosen from senior employees. Recently, however, the focus has shifted to changing the board from executive organ to monitoring mechanism, facilitated by the reform to increase independent (outside) directors. The female participation in the board could be another driver for the orientation towards the monitoring board, radically changing the traditional “insiders’ community.” Alternatively, in a company that still appoints most board members from among the senior employees, the increased female directors could serve as the role model for female employees, facilitating the gender diversity in the workplace, but reforming the board structure only gradually.

買収防衛策とコーポレート・ガバナンス―M&Aのもうひとつの役割―

買収防衛策とコーポレート・ガバナンス―M&Aのもうひとつの役割―

Foreign Shareholders and Corporate Governance in Japan

Shareholders are one of the most critical players in corporate governance. Contrary to the stereotypical understanding of Japanese companies, widely held equity ownership and foreign investors constituting the largest investor category are commonly observed in large Japanese companies. Given this shareholding structure, foreign shareholders have a potentially significant influence on corporate governance in Japan; however, their role has rarely been analyzed from the perspective of corporate law. This paper argues that the current legal environment is at the halfway point in its attempt to get the most out of their potential influence. The aggressive shareholder activism by foreign investors has faced the skeptical attitude of not only the target company’s management, but also the government and the courts. Although the recent reform in corporate governance led by the government is bringing about a change in the business environment, it is too early to conclude that it will eliminate the resistance against shareholders’ activism. This paper argues that the law should prepare the environment to support mild shareholder engagement by relatively passive investors, such as those encouraging the collaboration among institutional investors.

日本の会社制度とコーポレート・ガバナンス その歴史的成り立ち

日本の会社制度とコーポレート・ガバナンス その歴史的成り立ち

Network Structures and Credit Risk in the Cross-Shareholdings Among Listed Japanese Companies

This study assesses the network structures of cross-shareholdings among listed Japanese companies using a dataset of 2,936 companies for fiscal years 2008-2015. First, we analyze the network structure of cross-shareholdings in the Japanese stock market using centrality measures. Financial institutions and companies in the motor manufacturing industry are central in the network in terms of degree centrality. By contrast, companies in various industries play a central role in terms of betweenness centrality. In addition, the implementation of Japan's Corporate Governance Code (JCGC) had a limited effect in reducing cross-shareholdings. Second, the credit risk analysis investigates the effect of cross-shareholdings using a panel regression. The result shows that the increase in the share of foreign companies did not increase the counterparty credit risk in the network. JCGC implementation could potentially counteract the control of cross-shareholdings of companies in the same sector. In addition, if a direct centrality measure increases, the connections via cross-shareholding become denser and increase credit risk. By contrast, if an indirect centrality increases, the connections become sparser and decrease credit risk. The results could give senior managers an important warning in terms of credit risk management related to cross-shareholdings.

Korporativno upravljanje u Japanu - sistemi odbora i nezavisnost članova uz osvrt na funkciju nadzornog odbora u srpskim kompanijama

The corporate governance in Japan was mostly characterized by the main-bank system, board members that are internally promoted executives and employee-focused management. That is why Japan has been behind other developed countries in appointing independent directors, partly due to its exclusionist corporate culture. After a quite period of detailed reforms today’s corporate governance in Japan neither converges uniformly with the American-type model, nor it’s simply adjusted with two-tire system of the German model of corporate governance. Rather, a hybrid-type system is becoming dominant as a choice for Japanese company law, so it is endorsed as a type of the best practice in corporate governance. It is certain that the reforms sought to achieve a more efficient system of internal control of the company’s business, which gave its expression in a complex mixed system with an emphasis on increasing the number of outside members. Relatively recent company law reforms in Serbia have made it possible to choose between one-tire and two-tire system, so domestic companies are opening up the question of a choice that is more acceptable for our business environment. Solutions that Japanese company law applied can be an excellent example of persistent efforts for using past experiences, correcting mistakes and bringing successes to the future.

Japanese corporate governance structure review and 'the logic of Ié'

In recent years, there have been voices that indicate changes had occurred in the activities model of the Japanese. Where does the problem of Japan's corporate governance structure actually lie, and how will the review of governance structure affect the family business of Japan? We would like to look into the meaning of governance structure review from the perspective of corporate management style based on 'the logic of Ié' that forms the unique cultural background of conventional Japanese corporate setup. In Japanese family business, the family ties that had been instilled naturally and spontaneously till now have to be reconnected while the preparation of corporate governance system is underway. For family business in Japan, what is required now is, as far as corporate governance is concerned, not to play around with the market rules, but to strike a balance in corporate governance aspect that matches the corporate culture of Japan.

Management Forecasts of Capital Investment and Earnings, the Cost of Equity Capital and Corporate Governance in Japan

This paper examines how management forecasts, the cost of equity capital and corporate governance are related, using Japanese data. As management forecasts, capital investment forecasts as well as earnings forecasts are comprehensively available in Japan. They reveal the following: First, better corporate governance systems enhance the quality of earnings forecasts, but do not improve that of capital investment forecasts. Second, firms with more precise earnings forecasts can enjoy lower cost of equity capital. Meanwhile, the precision of capital investment forecasts has no relation with the cost of equity capital. Finally, the precision of capital investment forecasts has a negative influence on the cost of capital as long as corporate governance is poorly built. These findings suggest that capital investment forecasts provide informativeness that is totally different from that in earnings forecasts to investors’ valuation. The precision of earnings forecasts is a substitute for the quality of corporate governance and that of capital investment forecasts plays a complementary role, making up for the information shortcomings arising out of the low quality of corporate governance.

The Corporate Governance in Japan in Transition

The Corporate Governance in Japan in Transition

The Corporate Governance in Japan in Transition

The Corporate Governance in Japan in Transition

Концептуальные основы системы управления в Японии

<p>В статье представлено исследование системы управления в Японии как феномена синтеза этики, эстетики, религии. Автор использовал методологический подход, основанный на комплексном анализе философского фундамента японской структуры управления, и показал неразрывную связь религиозно-философской трактовки власти, принципов толерантности, традиционных социальных концепций, речевого этикета в японской модели управления.</p><p>В исследовании акцентируется внимание на уникальности японской самобытной трактовки власти, имеющей корни синтоистского и конфуцианского происхождения, принципиальной важности в управлении не только порядка соподчинения, но и абсолютной гармонии со-бытия всех ступеней. Реализация принципа wa («гармонии») рассматривается в русле концепций: ittaikan («чувство единства»), oyakokankei («отношения родитель — ребенок»), amae (чувство зависимости).</p><p>Управление в Японии рассматривается как искусство, обладающее богатым набором средств выражения основных принципов. Среди них особо отмечается техника принятия решений nemawashi («вращение вокруг корня»), стиль общения — убеждения settoku, принципы коммуникации ishindenshin («от сердца к сердцу»).</p><p>В статье прослеживается также глубокая взаимосвязь<strong> </strong>философии толерантности и искусства управления в японской традиции. Основное внимание уделяется характеристике социально-философских концепций, которые явились фундаментом иерархической структуры японского социума.</p><p>Данные традиционные концепции присутствуют в современной Японии не только на уровне теоретического постулата, но и в реалиях механизма управления всех уровней — от небольших коллективов до крупных предприятий, компаний и государства в целом. Результаты исследования позволяют представить иерархическую структуру управления Японии как целостный комплекс, отражающий характерную онтологию миропонимания, раскрывают механизм руководства, обеспечивающий высокий темп экономического развития страны. </p>

Does Ownership Really Matter? : The Role of Foreign Investors in Corporate Governance in Japan

1997년의 금융위기 이후, 일본 기업의 소유구조는 내부자 지배에서 외부자 지배 구조로 변화했다. 이 글은 외국인 기관투자가의 역할에 초점을 맞추면서 기업소유구조의 극적인 변화가 기업지배구조와 기업가치에 끼친 영향에 대해 분석한다. 증가한 외국인 소유의 역할을 두고 서로 대립하는 두 가지 견해가 존재한다. 긍정적인 견해는 외국인 투자가가 감시 능력이 매우 높고 기업지배구조를 개선하며, 그 결과 기업의 실적을 향상시킨다는 것이다. 반대로 부정적인 견해는 외국인 투자가의 투자 전략이 매우 편향되어 있고 특정 기업에 대한 헌신도가 낮다는 것이다. 비록 외국인 소유와 높은 기업 실적 간에 상관관계가 관측되기는 하나, 이것은 피상적인 것일 수 있다. 높은 주식 수익률은 주식 수요에 의해 유인될 수 있는 것이고 기업 실적은 단순히 양질의 기업에 대한 외국인 투자가의 선호를 반영하는 것일 수 있다. 두 견해 중 어느 쪽이 더 설득력 있는지 결정하기 위해 우리는 독특한 장기적 데이터 세트를 구축했다. 그리고 외국인 소유의 결정 요소를 검토하고 외국인 소유가 주식 수익과 기업 실적에 미치는 영향을 조사했다. 먼저 외국인 투자가의 투자 행위는 어떤 특정한 편향(bias)이 특징이고, 기업지배구조의 성격을 고려해서 이루어진다는 점을 발견했다. 두 번째 발견 사항은 외국인 투자가 기업의 주식 수익에 상당한 영향을 미쳤다는 점이다. 세 번째는 역의 인과관계(reverse causality)를 통제한 후에도 증가하는 외국인 투자는 기업 실적에 양의 효과를 미쳤다는 점이다. 이는 일단 외국인 기관 투자가들의 주식 보유량이 증가하고 나면 이들이 기업에 대해 규율자 역할을 했음을 보여준다.

Effective Corporate Governance and Financial Reporting in Japan

This paper examines corporate governance in Japan since the 1990s. Its focus includes financial reporting, a key part of good governance. It offers an overview of various legal, institutional, and stakeholder aspects of governance, followed by an investigation of Japanese accounting, disclosure, and reporting. The paper presumes that accurate financial reporting is a prerequisite for good corporate governance. Bad governance often follows from fraudulent financial reporting. The paper also considers the status of international financial reporting standards, the nature of fraudulent financial reporting, the all-too-common practice of window dressing in Japan, the liabilities of corporate audit board members and financial auditors. Our findings suggest that the existing high quality laws, codes, guidelines, and institutional arrangements do improve corporate governance. Yet in practice, the quality of corporate governance in Japan has not matched the quality of its codes and regulations. The paper discusses Japan's new corporate governance code. It concludes that this code is excellent, but that more needs to be done to improve financial reporting. Finally, a number of suggestions are offered to enhance corporate governance and reduce fraudulent reporting.

Corporate Governance and Transparency in Japan

We investigate the effect of corporate governance on corporate transparency in Japan, as indicated by the richness of the information environment for Japanese companies. We focus on firms’ disclosure frequency, properties of analysts’ forecasts and the speed of price discovery as indicators of corporate transparency. We find corporate governance in Japan is associated with increased disclosure and greater analyst following, but not more timely price discovery. In further analysis, we confirm board structure and composition are important factors influencing the firm’s level of disclosure and its analyst following, as in Western countries. However, analysts appear to be more optimistic about Japanese firms with better board structures when forecasting future performance. Compensation structures and the level of directors’ share ownership are other factors influencing the accuracy of analysts’ earnings forecasts. In contrast, outside ownership by foreign investors has little influence. Our results are consistent with the view that traditional Japanese corporate groupings and cross-shareholdings provide a strong motivation for disclosure through monitoring and enforcement. Our results show Western style corporate governance has a large role to play in disclosure by Japanese firms, but traditional Japanese structures are still important to corporate transparency.