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Corporate GovernanceWhat Can Be Learned From Japan?$
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Simon Learmount

Print publication date: 2004

Print ISBN-13: 9780199269082

Published to Oxford Scholarship Online: September 2007

DOI: 10.1093/acprof:oso/9780199269082.001.0001

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Japanese Directors—Elders of the Corporate Community

Japanese Directors—Elders of the Corporate Community

(p.125) 7 Japanese Directors—Elders of the Corporate Community
Corporate Governance

Simon Learmount (Contributor Webpage)

Oxford University Press

This chapter present an analysis of the role of senior management in the governance of the companies studied. The arguments presented support the analysis put forward by mainstream critics of Japanese senior management — that the board of directors appears to be little more than a ceremonial body, decision-making power is concentrated in the hands of a small executive management committee. Also the board of auditors does not monitor management, external directors are not independent, and the Annual General Meeting (AGM) does not give shareholders any real opportunity to communicate with managers. However, it is argued that putting these conclusions forward as evidence that Japanese senior management must therefore be ‘entrenched’, misconstrues the role of senior management in the governance of their companies. Rather than acting as a bridge between shareholders and management, senior managers appear to be the linchpin of the corporate community, and in this respect are at the heart of a robust system of governance: they act to cohere a system of responsibilities, reciprocal obligation, and trust, which operates through interpersonal relationships within and between companies.

Keywords:   corporate governance, senior management, board of directors, Annual General Meeting

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