A study on the ineffectiveness of corporate governance in Japan

Many Japanese listed companies have tried to improve their governance. However, a huge number of them are not meeting the needs of stakeholders and other concerned parties, for a number of reasons. First, there is widespread inadequate supervision and inability to deter corporate failures such as the Olympus scandal. Secondly, companies try to protect their executives from external control. Thirdly, there are not enough tools and established measures to protect the pension system. Fourthly, corporate governance in Japan is systematically weak. There is little communication between management and outside board members. There are few external viewpoints presented to the board concerning risk management, firm competitiveness and efficient use of capital.