Japanese Corporate Governance - A White Paper


This White Paper on Board Structure provides a clear and detailed picture of the state of corporate governance in Japan. We analyse the board structures of companies in the Topix 500 index and make comparisons with other countries to bring a global perspective to the situation in Japan.



Towards Effective Governance

While there is no “one size fits all” approach to governance, we think that it is helpful to have a framework to assess whether a company can demonstrate proper stewardship of its assets and create value over time. Broadly speaking, good corporate governance practices have the following characteristics: 1) Boards tend to work best when there is diversity of thought, skills and expertise to evaluate what is in the best interest of the company and its share owners. Entrenched boards can often be an impediment to this.

2) Boards tend to work more effectively when there is strong independent representation to constructively advise and challenge management.


3) Boards and should be paid for performance. Remuneration structures should be aligned with the interests of shareholders and tied to the long-term strategic plan. Poorly constructed plans can lead to short-termism, excessive risk-taking and may be harmful to shareholders.

Board Entrenchment





Global peers



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