Independent Directors in Japan – Changing Corporate Governance?

Journal of Japanese Law (ZJapanR), Vol. 23, No. 46, pp. 85-129, 2018

Max Planck Private Law Research Paper No. 18/23

47 Pages Posted: 12 Dec 2018 Last revised: 13 Dec 2018


Effective monitoring of management is at the core of the corporate governance debate. One tool to compensate for existing monitoring deficits is the independent director. While board independence is a global standard of “good corporate governance,” it has increasingly become the subject of hefty criticism, not least in the US as its country of origin. In contrast, the reception of the independent director in Japan has only recently picked up speed against the background of Abenomics, a plan for revitalizing the Japanese economy.

This article examines the question of how the independent director as a legal transplant fits into the corporate governance system in Japan, which has so far been largely isolated from outsider influence. The study begins by providing the comparative background necessary for understanding recent Japanese developments. It then examines the institutional framework and characteristics of traditional Japanese corporate governance before discussing the opening of the closed system through the reforms of the twenty-first century, including those of 2015. Finally, it explores the crucial question of whether these reforms and the independent director in its current form can build on or bring about substantial change to Japanese corporate governance.

Note: This article is published in the Max Planck Private Law Research Paper Series with the generous and exceptional permission of the Journal of Japanese Law. At the homepage of the Journal of Japanese Law abstracts of the contributions found in the last four issues are available, all other articles appearing in previous issues are ready for download in full-text, print-version form as PDF documents.

Keywords: monitoring board, compliance, Abenomics, legal transplant, Tokyo Stock Exchange, Companies Act, self-regulation, comply or explain, corporate culture, shareholder structure, separation of ownership and control, listing regulations, agency conflict

Suggested Citation

Spiegel, Torsten, Independent Directors in Japan – Changing Corporate Governance?. Journal of Japanese Law (ZJapanR), Vol. 23, No. 46, pp. 85-129, 2018; Max Planck Private Law Research Paper No. 18/23. Available at SSRN:

Torsten Spiegel (Contact Author)

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