9.3 Japanese Model

The Japanese model of corporate governance, also known as the "insider" model, is distinctively characterized by strong relationships between companies, banks, and other stakeholders.


Key Features

  • Keiretsu System: Companies often belong to a keiretsu, a network of interlinked businesses with cross-shareholdings and close relationships. This system fosters long-term stability and mutual support.

  • Main Bank System: Banks play a crucial role in corporate governance by providing financing and monitoring the performance of companies. The main bank often has significant influence over management decisions.

  • Employee Loyalty: Companies emphasize lifetime employment and strong employee loyalty. Workers' interests are considered an integral part of corporate governance.

  • Consensus-Based Decision Making: Decisions are often made through a consensus-building process, which can involve extensive discussions and consultations within the company.

  • Focus on Long-Term Goals: The Japanese model places a strong emphasis on long-term goals and sustainable growth rather than short-term profits.


Last modified: Friday, 18 October 2024, 12:44 PM