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Japanese Corporate Governance and the Principle of “Internalism”

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  • John Buchanan

Abstract

Japanese corporate governance can be analysed in terms of a defining characteristic of “internalism”: the belief that companies should be controlled by internally appointed managers who are integrated into their firms. Examples are offered from recent contacts with corporate management and other sources to illustrate how this determines the response of management to specific developments. Internalism depends on a socio‐corporate environment created by specific historical and economic circumstances. Potentially disruptive elements exist which could alter this environment and undermine the foundations on which internalism rests. However, major change seems unlikely in the near future.

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  • John Buchanan, 2007. "Japanese Corporate Governance and the Principle of “Internalism”," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(1), pages 27-35, January.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:1:p:27-35
    DOI: 10.1111/j.1467-8683.2007.00539.x
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    References listed on IDEAS

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    1. Naohito Abe & Taehun Jung, 2004. "Cross-Shareholdings, Outside Directors, and Managerial Turnover: The Case of Japan," Hi-Stat Discussion Paper Series d04-38, Institute of Economic Research, Hitotsubashi University.
    2. Okuno-Fujiwara, Masahiro & Okazaki, Tetsuji (ed.), 1999. "The Japanese Economic System and its Historical Origins," OUP Catalogue, Oxford University Press, number 9780198289012.
    3. Yoshiro Miwa & J. Mark Ramseyer, 2005. "Who Appoints Them, What Do They Do? Evidence on Outside Directors from Japan," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 299-337, June.
    4. Learmount, Simon, 2002. "Corporate Governance: What Can Be Learned From Japan?," OUP Catalogue, Oxford University Press, number 9780199252916.
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    Cited by:

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    3. Yoo, Taeyoung & Jung, Dong Kwan, 2015. "Corporate governance change and performance: The roles of traditional mechanisms in France and South Korea," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 40-53.
    4. Mohammad Badrul Haider & Kimitaka Nishitani, 2022. "Ownership structure, corporate governance, and assurance in sustainability reporting: evidence from Japan," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(4), pages 374-388, December.
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    6. John Buchanan & Dominic Heesang Chai & Simon Deakin, 2013. "Agency Theory in Practice: A Qualitative Study of Hedge Fund Activism in Japan," Working Papers wp448, Centre for Business Research, University of Cambridge.
    7. Kathryn Harrigan, 2014. "Comparing corporate governance practices and exit decisions between US and Japanese firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(4), pages 975-988, November.

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