scholarly journals Corporate governance reform in Japan: A behavioral view

2020 ◽  
Vol 16 (1) ◽  
pp. 47-59 ◽  
Author(s):  
Daisuke Asaoka
Keyword(s):  
Corporate Governance ◽  
Law And Economics ◽  
Collective Intelligence ◽  
Governance Reform ◽  
Outside Directors ◽  
Corporate Misconduct ◽  
Listed Firms ◽  
Corporate Governance Reform ◽  
The Board Of Directors ◽  
Behavioral Law And Economics

Corporate governance reform in Japan was triggered by the introduction of a new corporate governance code in 2015. The code is notable for requiring the addition of two or more independent directors to the boards of listed firms, which previously had consisted largely of internally promoted directors enjoying lifetime employment. Applying the framework of behavioral law and economics, we analyze the change from the two aspects of “offense” and “defense” by the board of directors, meaning, respectively, enhancing the quality of group decision-making by producing collective intelligence, and preventing corporate misconduct by introducing the viewpoints of outsiders. The former is not immune to psychological biases such as groupthink and escalation of commitment, but these can be mitigated by ensuring equal consideration of all participants’ viewpoints, and, notably, the participation of women. The latter is affected by other biases, such as obedience to authority and diffusion of responsibility, but establishing an internal system for reporting misconduct, with outside directors at the top, can be effective if the outsiders’ position is perceived as credible.

scholarly journals JAPANESE CORPORATE GOVERNANCE REFORM : WHAT IS REQUIRED FOR EFFECTIVE FUNCTIONING OF OUTSIDE DIRECTORS ?

2019 ◽  
Vol 8 (1) ◽  
pp. 11
Author(s):  
Masaru Suzuki
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Lessons Learned ◽  
Gradual Change ◽  
Governance Reform ◽  
Outside Directors ◽  
Governance System ◽  
Corporate Scandals ◽  
Management Board ◽  
Corporate Governance Reform

<p>The topic of outside directors’ functions has been attracting significant attention for many years now, especially in the discussions about corporate governance reform in Japan. Over the last two decades, most listed Japanese companies have voluntarily introduced outside directors into their boardrooms, in line with the gradual change in an overall corporate governance system toward a monitoring board model moving away from the more traditional management board model. It appears the recent trend is for companies to add outside directors to their boards of directors to increase corporate values.<strong> </strong>In the midst of transforming the management board model into the monitoring board model, closely reexamining the functions of outside directors is necessary. What can be concluded from the lessons learned from recent corporate scandals and the discussions concerning the functions of outside directors is: (1) outside directors should be truly independent from the company’s management; and (2) outside directors need access to the company’s corporate information in order to prevent corporate scandals and to provide appropriate advice to the company’s management. <strong> </strong>This paper aims at considering how to make outside directors more effective and their roles more substantial, based on the history of corporate governance reform in Japan.</p>

The Value of Outside Directors: Evidence from Corporate Governance Reform in Korea

2007 ◽  
Vol 42 (4) ◽  
pp. 941-962 ◽  
Author(s):  
Jongmoo Jay Choi ◽  
Sae Woon Park ◽  
Sean Sehyun Yoo
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Asian Financial Crisis ◽  
Independent Directors ◽  
Board Composition ◽  
Governance Reform ◽  
Outside Directors ◽  
Family Control ◽  
Indigenous Institutions ◽  
Corporate Governance Reform

AbstractThis paper examines the valuation impacts of outside independent directors in Korea, where a regulation requiring outside directors was instituted after the Asian financial crisis. In contrast to studies of U.S. firms, the effects of independent directors on firm performance are strongly positive. Foreigners also have positive impacts. The effects of indigenous institutions such as chaebol or family control are insignificant or negative. This implies that the effect of outsiders depends on board composition as well as the nature of the market in which the firm operates.

scholarly journals Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya

2018 ◽  
Vol 14 (1) ◽  
pp. 22-33 ◽  
Author(s):  
Jill Atkins ◽  
Mohamed Zakari ◽  
Ismail Elshahoubi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Listed Companies ◽  
Board Members ◽  
Corporate Boards ◽  
Listed Firms ◽  
Stakeholder Groups ◽  
The Board Of Directors ◽  
Executive Managers

This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.

scholarly journals Improving governance leads to improved corporate communication

2008 ◽  
Vol 5 (4) ◽  
pp. 26-33 ◽  
Author(s):  
Poh-Ling Ho ◽  
Gregory Tower ◽  
Dulacha G. Barako
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Positive Impact ◽  
Governance Structure ◽  
Corporate Communication ◽  
Governance Reform ◽  
Corporate Governance Structure ◽  
Listed Firms ◽  
Corporate Change ◽  
Regulatory Reforms

Significant changes and reforms have been initiated around the world and in a Malaysian context with the aim of enhancing corporate governance and transparency. The nature of these regulatory reforms clearly impacted on firm management’s incentives to disclose information voluntarily. This study empirically examines the influence of corporate governance structure on voluntary disclosure practices of Malaysian listed firms from 1996 to 2001. This important timeframe encompasses the time period before the Asian Financial Crisis and the aftermath of regulatory reforms such as the revamped KLSE Listing Requirement released in 2001, widely recognized as a major milestone in Malaysian corporate governance reform through the enhanced corporate disclosure. Our findings show that the extent of voluntary communication is generally low, albeit showing an increase from 1996 to 2001. There is an increase in the number of corporate governance characteristics adopted by firms, suggesting firms exhibiting an improvement in the corporate governance structure. While corporate governance structure is not a significant explanatory variable in 1996, our results suggest that a firm’s corporate governance structure has a significantly positive impact on voluntary disclosure in 2001. Large companies voluntarily disclose more information in both years. The implications are that a greater focus on corporate governance is resulting in an increase in transparency in the Malaysian setting. Corporate change is generating better corporate communication

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