More Japanese companies are appointing external directors to oversee their management after a seemingly endless series of scandals at leading firms raised doubts about corporate governance in this country. The Abe administration has enacted a revised Company Law that urges, though not requires, large companies to introduce outside directors.
Still, what matters will not be whether companies have outside directors but whether the companies are really serious about putting their management to independent scrutiny by outsiders.
According to the Tokyo Stock Exchange, a record 74 percent of the roughly 1,800 firms listed on its First Section have outside directors on their board, including top-notch companies like Nippon Steel & Sumitomo Metal Corp., Cannon Inc. and Toray Industries. These firms decided to introduce such directors for the first time at this year's general shareholders' meetings. The figure has sharply climbed from 46 percent in 2009 and 62 percent last year. About 34 percent of the listed firms have two or more external directors.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.