Dawn of Corporate Governance: Japan Must Change

  • Ryohei Yanagi


Asian Corporate Governance Association White Paper (2008) and global investor surveys (Yanagi in The ROE revolution and financial strategy. Chuokeizai-Sha, 2015.) have revealed that foreign investors have harsh views and deep dissatisfaction with Corporate Japan in connection to its value-destruction arising out of the lack of corporate governance (CG) and capital efficiency (ROE) in comparison with the other advanced nations in the world. This situation is deeply rooted in the historical bank-dominance culture in Japan as evidenced by significant cross-shareholdings. However, in the wake of a collapse of the bubble economy and ensuing unwinding of cross-shareholdings, Japan has been transitioning from debt-governance to equity governance. Having learned from the voices of foreign investors who replaced cross-holdings, the Abe administration in Japan finally adopted the Stewardship Code (SC) in 2014 and the Corporate Governance Code (CGC) in 2015. This will be the dawn of Japan’s CG improvement. This chapter serves as an introduction to this change.


Debt-governance Equity-governance Cross-shareholdings Stewardship code Corporate governance code The Ito review 


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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  1. 1.EisaiBunkyōJapan

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