Corporate governance in Japan and pressure to change

: a critical analysis

Abstract

This study focuses on corporate governance in Japan during the period from 1989 to 2007 when Japan had come under global pressure to change its culturally specific corporate governance system and converge with the Anglo-American corporate governance system. From a critical theoretical perspective the study explores how the U.S. administration, pursuing a neo-liberal agenda, put pressure on the Japanese government to change the laws relating to corporate governance. The study shows how the Japanese government, in recognition of trade dependencies and in pursuance of its on neoliberal agenda, reacted to the demands of the U.S. administration. The study also provides insights into how the Japan Corporate Governance Forum in an attempt at self-regulation aimed to establish a set of Corporate Governance Principles that would constitute good practice for Japanese companies. The empirical analysis indicates that despite the pressure from the U.S. and the economic crisis that Japan experienced during the period from 1989 to 2007 capture was not complete. Japanese companies are now allowed by law to follow either the Japanese or Anglo-American corporate governance model, but as they have a choice, the majority of Japanese companies still follow the Japanese model of corporate governance. Similarly, the Japan Corporate Governance Forum had to revise its Corporate Governance Principles, which had advocated the Anglo-American model and to include the Japanese model into their set of principles to reflect contextual developments.The analysis also indicates that in the context of pressure to converge with the Anglo-American corporate governance model the Japanese way of life came under threat because of the different values underpinning the Anglo-American corporate governance model. As a consequence of changing employment practices, emanating from a change in the governance system, more uncertainty was introduced that negatively impacted upon the people living in Japan. The study concludes that any attempt to change the Japanese corporate governance system should adopt a holistic perspective and be concerned to enhance well-being. In this context it is important to also consider the impact that possible changes to the Japanese corporate governance system might have on well-being globally.

Date of Award	2009
Original language	English
Supervisor	Sonja Gallhofer (Supervisor) & William Nixon (Supervisor)