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Japanese Corporate Governance

Essay by   •  December 3, 2018  •  Case Study  •  1,339 Words (6 Pages)  •  35 Views

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Topic Title: Case Study Analysis Japanese corporate governance

Contents

Introduction to the Case Study        2

Identifying pertinent issues        3

Effects of changing corporate policies within Japan        3

Difference of Corporate values and decision making within US and Japan        3

Evaluation to the issues and effects of these changes        4

Action plans and recommendation        5

References        7

Introduction to the Case Study

The case study analysis has been formulated to provide evidence in how Japanese corporate structure has changed in the past years. The major part of the analysis provides information to the US systems of corporate laws as well. The case study will provide sustainable evidence to different legislative and Institutional changes brought with these changes. The study will also show how the corporate policies have impacted different people within the country. The people represent the organizations and its employees, the Japanese financial markets and the overall economy of the country.

Identifying pertinent issues

Effects of changing corporate policies within Japan

The corporate models being followed in Japan had been observed to be on their old trends and principles before the 1990. These trends, however, were challenged by different pressures coming from international sources. The pressures can be boiled down towards two main sources, which includes the American model of corporation governance and the great recessions. The recession occurring within the world tarnished different countries. This brought close many nations who sought out various policies to tackle the problem. Japan experienced a downfall to see its yen rising but the economy to fall. This time demanded the liberalization of the free markets and implementation of US based strategies. The investors within Japan were also believed to be obliged by the success of USA governing principles. The adoption of these policies meant to how the old and traditional Japanese methods were to be abandoned. One of the major drivers for the change includes the collapse of the bubble economy. The pressures were realized by various Japanese companies and soon changed their trends. The changing policies include executive officers to be appointed and change in their compensations. The companies also managed new stock options plans for the investors. The last change includes the shareholder composition, which is managed by macroeconomic principles (Shishido, 2015).

Difference of Corporate values and decision making within US and Japan

One of the major highlights of the corporate structure shows to how the firms and corporations operate within both countries. The operation is different in terms of providing facilitation to the customers and the employees as well. The corporate policies of the company represents to how they do business and treat different company members. The social, historical and other factor have shown to how Japan is different from US. The first sector of the policy can be discussed in reference to the board of directors serving the company. The normal structure and perception within japan shows that outsiders of the company cannot hold any implications within as well. These people might be termed as directors of the company but they cannot be provided impact and power. The US corporate laws provides a complete new and opposite direction of this believe. It states that outside directors are allowed to hold different compositions within the company. This is primarily based on how the directors provide financial assistance to the company or purchase equity funds as well. These concepts shows to how both countries have and intermingled set of rules (Kathy, 2015).

The second major source of difference in decision-making comes from the annual auditing committees found within these companies. The auditing process is defined as the evaluation of all the financial matters of the company. These matters include the company assets, the company savings and their overall investments as well. The corporate laws regarding these committees are significantly different within US and Japan. The US laws state that all members of the financial council can be members of the company as well. This also defines to how these members must have suffice knowledge of their environment and degrees. The Japanese laws go completely against these principles. The laws states to how the audit committee cannot be formed by the same members of the company. The members must be different and hence should not have any ties with the company (Koyama, 2016).

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