Corporate Governance in the 21st Century
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Corporate Governance in the 21st Century

Japan’s Gradual Transformation

Edited by Luke Nottage, Leon Wolff and Kent Anderson

The ‘lost decade’ of economic stagnation in Japan during the 1990s has become a ‘found decade’ for regulatory and institutional reform. Nowhere is this more evident than in corporate law. In 2005, for example, a spate of reforms to the Commercial Code culminated in the new Company Act, a statute promising greater organisational flexibility and shareholder empowerment for Japanese corporations competing in a more globalised economy. But does this new law herald a more ‘Americanised’ system of corporate governance? Has Japan embraced shareholder primacy over its traditional loyalty to other key stakeholders such as ‘main banks’, core employees, and partners within diffuse corporate (keiretsu) groups? This book argues that a more complex ‘gradual transformation’ is unfolding in Japan – a process evident in many other post-industrial economies.
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Chapter 10: Conclusions: Japan’s Largest Companies, Then and Now

Souichirou Kozuka


10. Conclusions: Japan’s largest corporations, then and now Souichirou Kozuka It seems like only yesterday. At the end of the 1980s, Japan’s economy was booming and its companies were making huge profits. Commentators argued for a ‘Japanese’ model of capitalism, an alternative to the Anglo-American model. Some academics tried to uncover the seemingly successful mechanisms underpinning the Japanese economy. Others criticised the alleged unfairness of Japanese socio-economic ordering that produced such prosperity. During the ensuing two decades, however, Japan experienced political and economic turmoil. The world’s attention has turned increasingly to the new economic powers – including China, Japan’s huge neighbour. The Japanese are reportedly uneasy about their lives and future prosperity. The US is regarded as the prototype for a successful market economy, while the Japanese model appears to have lost much of its attractiveness to overseas researchers. Yet the two decades since the bursting of the bubble economy have been an era of extensive law reform in Japan. As detailed in this book’s introductory chapter, corporate law has gone through repeated reforms and amendments. This culminated in the enactment of the new Company Law (No. 86 of 2005), spun off from the century-old Commercial Code (No. 48 of 1896). Other business law has also been subject to constant reform. Securities regulation, for example, now centres on the Financial Instruments Exchange Law (No. 65 of 2006), renamed and enlarged in scope of application to regulate all types of investment products. These two simultaneous trends, namely the widespread sense of decline...

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