George Olcott, a guest professor at the Faculty of Commerce at Keio University and an outside director at Hitachi Chemical and Denso Corporation, gave a speech on this topic at the recent Columbia Business School CJEB conference on corporate governance in Japan. His major point was that a key aim of recent reforms to create higher level of engagement between boards and shareholders, but “engagement” without creating “engageable” boards is ineffective, because Japanese boards are still only nominally a “supreme decisionmaking body” and because the role of independent directors is undermined by lack of strategic discussion at the board.
While giving some advice based partly on a McKinsey report about how to facilitate constructive engagement, he concludes that the strategic role of the board itself needs to be strengthened in order for successful engagement top lace. He also shows that whereas the number of foreign directors at Japanese listed firms has barely increased over the past 13 years, the number of female directors has risen by 540%, clearly showing that not all of the strategic imperatives of globalization are being given equal weight in the boardroom.
His conclusions are very similar to themes that BDTI teaches in its director training programs.
Download Professor Olcott’s presentation: