Japanese Companies and their Shareholders

This chapter present an analysis of the interaction between the Japanese companies studied and their shareholders. It is generally claimed that Japanese shareholders have the ability to monitor managers and hold them accountable circumscribed. However, the growth of foreign holdings of Japanese equities and the poor economic performance of the Japanese economy during the 1990s are contributing to the collapse of the traditional system of stable shareholdings, and bringing about a reassertion of shareholder rights. It is argued that Japanese managers are not held accountable by shareholders, nor do they feel particularly accountable to them. This does not seem to be changing despite the introduction of many new practices, which are affecting the way that shareholders relate to companies in Japan.