The Performance Effects and Determinants of Corporate Governance Reform 1

Hideaki Miyajima*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

9 Citations (Scopus)


This chapter addresses the introduction of the executive officer system as an alternative to the traditional insider board structure. As a result, since 1997 board sizes have decreased and a greater separation has been made between monitoring and management responsibilities. Some firms have also introduced outside directors and performance-related compensation schemes, such as stock options. The extent of these reforms among Japanese firms is examined using a survey-based Corporate Governance Score (CGS) for each corporation. Higher CGS scores are associated with better performance, a higher percentage of foreign shareholders, and a lower percentage of stable shareholders. However, among firms exposed to capital market pressures, the presence of strong employee participation also has a significant positive impact on the degree of reform and suggests a strong mutual reliance on capital markets and long-term employment among strongly performing Japanese firms.

Original languageEnglish
Title of host publicationCorporate Governance in Japan
Subtitle of host publicationInstitutional Change and Organizational Diversity
PublisherOxford University Press
ISBN (Electronic)9780191713705
ISBN (Print)9780199284511
Publication statusPublished - 2007 Sept 1
Externally publishedYes


  • Board of directors
  • Employee participation
  • Independence
  • Japanese economy
  • Non-executive directors
  • Shareholder rights

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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