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Matsui, Tomoyo --- "Corporate Governance and Closely-held Companies in Japan: The Untold Story" [2008] ELECD 385; in Nottage, Luke; Wolff, Leon; Anderson, Kent (eds), "Corporate Governance in the 21st Century" (Edward Elgar Publishing, 2008)

Book Title: Corporate Governance in the 21st Century

Editor(s): Nottage, Luke; Wolff, Leon; Anderson, Kent

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847209238

Section: Chapter 5

Section Title: Corporate Governance and Closely-held Companies in Japan: The Untold Story

Author(s): Matsui, Tomoyo

Number of pages: 21

Extract:

5. Corporate governance and closely-held
companies in Japan: the untold story
Tomoyo Matsui*
Most of the English literature on Japanese corporate governance focuses on
large, publicly listed companies. For example, the current debate over the
erosion or the endurance of the `J-firm' ­ characterised by boards of internally
promoted directors, main bank monitoring, keiretsu cross-shareholding
arrangements, low-level M&A activity and lifelong employment (Aoki, 1988)
­ revolves around governance features typically observed in large-scale,
publicly listed and internationally renowned corporations.
Yet listed companies account for only a fraction of all business enterprise
in Japan. As of 30 November 2007, there were 4,000 companies listed on one
of Japan's six stock exchanges.1 By contrast, surveys by the Ministry of
International Affairs and Communication (MIAC), 2004a; 2004b) show that
there are over 5 million unincorporated businesses across the country, 2.86
million of which own offices or factories. A survey of taxation records by the
National Tax Agency (NTA, 2005) reveals that there are 2.59 million incorpo-
rated entities. Of these, 1.45 million are private, closely-held (or `limited
liability') companies (yugen kaisha)2 and a further 1.04 million are companies
limited by shares (or `joint stock' corporations, kabushiki kaisha). Although
these statistics derive from surveys conducted at different times and with

* Research for this chapter was supported by and completed during a Japan
Society for the Promotion of Science (JSPS) Postdoctoral Fellowship for Research
Abroad.
1 According to the public websites of ...