|TANAKA Kazuhiro (Faculty Fellow, RIETI / Associate Professor, Hitotsubashi University Graduate School of Commerce and Management)
|April 2006 06-J-035
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This paper attempts to reveal what perceptions listed Japanese companies currently hold about the core corporate governance question of who owns the company ("sovereignty view"). The paper takes a hypothesis-finding approach based on the results of a questionnaire survey of Japanese companies conducted in 2005.
The following characteristics can be extracted from the recent sovereignty views of Japanese companies. Although 1) it is acknowledged that inclination toward shareholder sovereignty is becoming evident in recent years, 2) such a shift is not necessarily taking place in a uniform manner but is a phenomenon conspicuously observable in "shareholder-oriented" companies; and 3) the phenomenon is developing primarily in aspects related to emphasis on shareholder interest and share prices. On the other hand, 4) even shareholder-oriented companies (that is, needless to say, employee-oriented companies) place at least some emphasis on the roles of employees. Indeed, 5) shareholders having a tangible influence on corporations are present in (or so judged by) a relatively large number of shareholder-oriented companies and apparently this is exactly why these companies take a shareholder-oriented stance. In other words, it is not necessarily the case that they have intrinsically developed faith in shareholders. 6) Discrepancies between the principle of shareholder sovereignty as a public stance and employee sovereignty as a true stance are particularly visible in shareholder-oriented companies but the same holds true, though to a varying extent, for employee-oriented companies. Thus, the presence of such discrepancies is posing a fundamental dilemma to listed Japanese companies as a whole.