Handbook on Corporate Governance in Financial Institutions

Handbook on Corporate Governance in Financial Institutions

Research Handbooks in Business and Management series

Edited by Christine A. Mallin

The global financial crisis has led to more and more focus on corporate governance and financial institutions. There has been much coverage in the media about various corporate governance related issues in banks and other financial institutions, such as executive directors’ remuneration and bankers’ bonuses, board composition and board diversity. This engaging book, dedicated to the corporate governance of banks and other financial institutions, makes a timely and accessible contribution to the literature in this area. The chapters highlight many of the shortcomings of corporate governance which have led to financial scandals, whilst indicating areas where corporate governance can be strengthened and improved.

Chapter 6: Corporate governance of Japanese banks

Christina L. Ahmadjian

Subjects: business and management, corporate governance, economics and finance, financial economics and regulation


This chapter explores the corporate governance of Japanese banks and how it has changed in the aftermath of the banking crisis of the 1990s and the global financial crisis of the 2000s. The cases of three banks _ Resona, Shinsei and Mizuho _ illustrate the diversity of corporate governance practices adopted during this period, and the roles of the Financial Services Agency (FSA) and the chief executive officers (CEOs) of banks themselves in promoting board reform. The cases show how boards of directors can play an important role in strategic reorientation and cultural change in banks, in particular through their nominations function. The cases also show that boards of directors in Japanese banks have had limited success in risk mitigation. The FSA, in contrast, has been successful in reducing risk in the banking sector, but less effective in encouraging strategic and cultural change to deal with changing domestic and global conditions.

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