A recent article put out by the SMU Office of Research, quoted second below, describes the work of Professor Yoshikawa of the Singapore Management University related to concepts of convergence in corporate governance as related to Asia and Japan. I personally think that the more recent 2013 paper that Professor Yoshikawa contributed to is equally, if not more, on point. In my own experience effective collaboration between management and outside directors can only occur if the latter’s perception of the CEO values and integrity, including his/her committment to governance, are high. This is true in any country, but it is even more true in Japan because the number of outside directors is small. (Comment by Nicholas Benes of BDTI)

1) Paper: “The Effects of CEO Trustworthiness on Directors’ Monitoring and Resource Provision2

Comment by Nicholas Benes at BDTI: The foreign press often tends to focus on each of these scandals as if they expose significant flaws in a recently installed set of governance “best practices” that in fact, is just now gathering momentum and evolving in Japan. However, the foreign press rarely specifies exactly what additional changes are needed, which is not easy to do. What the recent scandals most directly reveal, is flaws in the corporate culture of particular firms. It is my own view that the combination of: (a) the content of the new practices (and upcoming reforms) (b) the degree to which they are sincerely deployed; and (c) the extent to which companies use external training to spread essential knowledge and awareness in the ranks, all affect the extent to which boards can effectively focus on “managing” and improving their own corporate culture.

”TOKYO, May 3 (Reuters) – A spate of high-profile scandals at leading Japanese companies show reforms and rhetoric aimed at improving the country’s corporate governance do not go far enough to unwind the culture of secrecy and hierarchy that plagues Japan Inc.