Japanese corporate governance: governance for the twenty-first century or a model in decline?

As the search for more responsive and robust forms of corporate governance continues internationally, this paper seeks to inform the current debate concerning the relative strengths and limitations of the Japanese system in the context of the rising demands and expectations of global investors. Using the current literature within the field and the annual reports of the top 50 Japanese companies, we look at the state of Japanese corporate governance now and its response to domestic and international pressures for change. The key findings suggest that despite the literature predictions and growing dissatisfaction with the model, Japanese corporate governance has been slow to change. The major exception appears to be an increase in merger and acquisition activity, but even this was found to be along distinctively Japanese lines. Finally, we assess the future implications for developing forms of corporate governance in both East and West.