Just for fun, here are some simple questions. I betmore than halfof the directors on Japanese public company boards cannot answer all 10questions correctly.
If you sit on the board of a private company in Japan, and you don't know the answers, you too may need to worry about what else you don't know.
1) How is the duty of due care interpreted in Japanese courts?What is the business judgment rule and how is it interpreted?
2) Given that interpretation, what arethe best ways to protect yourself?
3)Can you resign whenever you want to, or need to?
4) If you resign, does your D&O coverage cover you if you aresubsequently sued?
5) Can the company promise toindemnify you in advancefor the full amount of any damages you bear in the case when you are sued for non-criminal, non-intentional acts that are not gross negligence?
6) What are the investigative powers/authorities of statutory auditors?
7) What are the investigative powers/authorities of directors?
8) If the President dies, can the board appoint someone who is not a director as a temporary CEO?
9) Is there a legal requirement for how often the board must meet?
10) If you don't think the board minutes are accurate, what should you do?
Nicholas Benes
The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.