The 1970s

Mapping Intimacies ◽

10.1093/oso/9780190640323.003.0003 ◽

2018 ◽

Author(s):

Brian R. Cheffins

Keyword(s):

Corporate Governance ◽

Reform Process ◽

Governance Reform ◽

Public Companies ◽

Managerial Capitalism ◽

Corporate Governance Reform ◽

Process Oriented ◽

Large Corporations

Chapter 3 addresses the 1970s, a decade when managerial capitalism continued to prevail in large American public companies but the scene was being set for its displacement. Confidence in large corporations and the executives running them suffered due to American businesses losing ground to foreign challengers, setbacks affecting prominent conglomerates, and revelations of illicit payments by numerous well-known corporations. The difficulties afflicting 1970s public companies helped to set in motion a corporate governance reform process oriented around improving managerial accountability which continues to this day. Regulation of business increased considerably during the opening half of the decade but erosion of faith in government ultimately undermined continued momentum in this direction.

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Increasing shareholder focus: the repercussions of the 2015 corporate governance reform in Japan

Journal of Management & Governance ◽

10.1007/s10997-021-09619-0 ◽

2021 ◽

Author(s):

Paweł Mielcarz ◽

Dmytro Osiichuk ◽

Karolina Puławska

Keyword(s):

Corporate Governance ◽

Employee Turnover ◽

Job Security ◽

Prima Facie ◽

Independent Directors ◽

Board Independence ◽

Governance Reform ◽

Public Companies ◽

Corporate Governance Reform ◽

Part Time

AbstractThe corporate governance reform promulgated in 2015 in Japan has contributed to a substantial increase of board independence and a reduction of average board tenure. Our empirical analysis covering 3405 public companies demonstrates that reinvigorated corporate oversight and an increasing post-reform shift towards prioritization of shareholder value have led to a persistent increase of corporate profitability, asset productivity, dividend payouts, acquisitions’ value, and valuation multiples. We also document a significant increase of sensitivity of executives’ and directors’ compensations to the dynamics of firms’ bottom lines. The positive changes are the most pronounced within companies where independent directors constitute a majority on the board. The most notable drawbacks of the reform are a significant reduction in net employment creation and in employee turnover within the largest companies. These might be a possible reason for the documented improvement in corporate performance. The number of part-time employees has also seen a significant increase. While being prima facie focused on reinvigorating the private sector, the corporate governance reform may implicitly undermine the established social contract based on job security. Therefore, our study is important from the perspective of sustainable development of the corporate sector as it demonstrates that while concentrating on improving corporate governance, it is also necessary to consider the business’ social responsibility.

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