The Effect of Amakudari on Bank Performance in the Post-Bubble Period

The topic of corporate governance has already received much discussion in the USA, Japan/Asia and Europe, but so far the scope of its implications have not been broadly explored. This chapter suggests an enlargement of the debate by presenting a new perspective which should go some way to providing a more comprehensive understanding of issues relating to enterprise governance in a capitalist economy. The underlying issue of corporate governance is essentially an issue of democracy within capitalism. More specifically, it concerns the nature of governance and its manifestation in legislation, institutions and practices both within and without corporations: about who governs whom and in what style, such that it becomes an issue of social relations and methods of management, and about how business organization is to be managed for the optimum achievement of its objectives. As democracy is generally understood to be a ‘virtue’, reforms in legislation, institutions and practices towards that end tend to be considered positively, at least insofar as they contribute to corporate competitiveness, efficiency and profitability. Governance is thus form, process and function in managing social relations and it manifests in particular forms depending upon the level at which it operates. The most popular area of corporate governance has been the relationship between shareholders and board members/Chief Executive Officer (CEO). In this study, however, we limit our discussion to reviewing why the issue of corporate governance emerged in the USA with an association with principles of democracy.