The evolution of the monitoring board in Japan: how the board performs monitoring function in Japanese corporate governance

Abstract

Purpose The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions. Design/Methodology/Approach Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance. Findings Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan. Originality/Value This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

Corporate risk-taking behaviour: Corporate governance perspective

“…As Claessens and Yurtoglu (2013) argued that during the Asian financial crisis in 1997, many companies that corporate governance is weak had face a high level of dropped in their shareholder's value. For those who involved in the global financial crisis in 2007, it brings an emerging issue that risk-related subject has been increasing rapidly (Miyamoto, 2019). Risk-taking done by the executives is controlled by some stakeholders within the company, such as the board of directors, audit committee, and also shareholders itself.…”