NRI Papers
No.47   May 1, 2002
  Corporate Governance:A New Phase for Japanese Companies  
Makoto KOMIYAMA and Yukinobu MASAOKA
        Reflecting the transformation of the capital market, corporate governance in Japan is undergoing dramatic changes. While the development of the framework for corporate governance, such as the introduction of the executive officer system, is showing some progress, it would appear that the principle objective--i.e., building a management system that increases benefits to stakeholders--has not necessarily been achieved.
    To make corporate governance function in Japanese companies, improving the M3parameters will be necessary. These are measurements (creating the information on which to judge management and financial performance), monitoring (developing the hardware and software for business monitoring), and motivation (providing more incentives for management to increase corporate value). Once these reforms have been implemented, an application system can be developed.
Contents
I Transformation of Corporate Governance
1 Globalization and Borderless Capital Markets
2 Approaches by Japanese Corporate Pioneers
3 Establishing a Legal Framework
II Current Status and Issues Concerning Corporate Governance
1 Current Status and Issues Concerning Organizational Reforms in Decision-Making Systems
2 Difficulties in Tackling Corporate Governance Reforms
III Responding to Demands with M3 Reforms
1 Improved Application System Essential to Establishing Corporate Governance
2 Reforming the Application System from Three Perspectives
IV Establishing an Application System for Corporate Governance Through M3 Reforms
1 Organizing Information for Judging Performance Depending on the Level of Decision-Making and Management
2 Developing Software and Hardware for Business Monitoring
3 Strengthening Management Incentives to Increase Corporate Value
V Quality of Corporate Governance Comes into Focus

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