Does the 2005 Reform Improve the Japanese Economy? The Current of Japanese Corporate Governance Reform

Abstract

Company law in Japan has recently undergone drastic reform. The 2005 reform is the last of a series of recent reforms in this area of the law. The notable points relating to corporate governance in the 2005 reform are as follows: First, the 2005 reform introduces a new corporate governance option for small stock companies to secure the fairness of the company’s financial statements: the accounting consultant. Second, the liabilities of directors have been modified.

Although the state of the Japanese economy is still uncertain, it is said that the most difficult part is over. We will need to examine the implementation of the new law to see whether the 2005 reform guarantees the soundness of management in Japan and improves the international competitiveness of Japanese companies in a real sense.