In an interview, Ishida Takeyuki
Executive director at Institutional Shareholder Services in Japan, talks about shifts in the post-kieretsu era.
I think Japanese ideas about corporate governance have changed in the past few years. Until pretty recently, people spoke of corporate governance in a manner more or less synonymous with “compliance.” Now there’s a lot more discussion of governance on a level that’s meaningful to investors. But I don’t think that the amendment of the Companies Act is the reason for that. I think there’s been a change in the environment that happened to coincide with the legal changes.
Nowadays, talk of acting in the “best interests of the shareholders” comes a bit more naturally from the mouths of Japanese executives. The same goes for terms like ROE [return on equity]. In the United States, on the other hand, the idea that the board of directors is responsible to the shareholders is pretty much taken for granted. In Japan, corporations are gradually reaching the stage where they are receptive to the idea. The governance climate is gradually changing, and I sense that foreign investors’ perception of Japanese business is changing as a result.