IDEAS home Printed from https://ideas.repec.org/p/eab/financ/22768.html
   My bibliography  Save this paper

Internal Promotion and the Effect of Board Monitoring : A Comparison of Japan and the United States

Author

Listed:
  • Meg Sato

    (Australia-Japan Research Centre)

Abstract

This paper analyses two pronounced features of Japanese corporate governance : large corporate boards almost entirely composed of insiders and the tendency to appoint CEOs through internal promotions. It is often argued that Japanese boards are less effective in monitoring CEOs than U.S. boards which tends to be composed of a small number of directors, majority of which are outsiders. I show that Japanese corporate governance exhibits less inefficiencies than U.S. corporate governance. I further discuss the recent changes in Japanese corporate governance and provide theoretical explanation that they do not necessarily enhance board monitoring.

Suggested Citation

  • Meg Sato, 2010. "Internal Promotion and the Effect of Board Monitoring : A Comparison of Japan and the United States," Finance Working Papers 22768, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:financ:22768
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/22768
    Download Restriction: no

    More about this item

    Keywords

    Board Monitoring; Distortion of Bargaining Surplus; Japanese Corporate Governance; US Corporate Governance; Board Size;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:financ:22768. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong). General contact details of provider: http://edirc.repec.org/data/eaberau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.