Lawley, Peter --- "Panacea or Placebo? An Empirical Analysis of the Effect of the Japanese Committee System Corporate Governance Law Reform" [2008] ELECD 386; 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 6

Section Title: Panacea or Placebo? An Empirical Analysis of the Effect of the Japanese Committee System Corporate Governance Law Reform

Author(s): Lawley, Peter

Number of pages: 26

Extract:

6. Panacea or placebo? An empirical
analysis of the effect of the Japanese
committee system corporate
governance law reform*
Peter Lawley
On two significant occasions in its modern history, Japan has undertaken law
reform on a massive scale and at a blistering pace. In the 1850s, Japan
embarked on the Meiji Restoration and achieved in thirty years a level of
industrial development it had taken Western powers nearly a century to attain
(Jansen, 1995). Beginning in the 1950s, post-war Japan transformed itself
from a nation bombed into third-world status into the economic envy of the
world only a few decades later (Dower, 1999).
Over the past fifteen years Japan has been attempting to repeat this feat.
The collapse of the Japanese economy in the early 1990s and its stagnation
during the `lost decade' (Milhaupt, 2006; Nottage and Wolff, 2005) has
spurred rapid and extensive corporate law reform. In the field of corporate
governance, a number of these reforms fill the gaps left by the decline of tradi-
tional monitoring mechanisms (Gilson and Milhaupt, 2005, pp. 347­52;
Puchniak, 2003, pp. 48­9). Some commentators argue that the nature of these
replacement mechanisms signals a shift toward a US-style corporate gover-
nance environment (Kelemen and Sibbit, 2002; Hansmann and Kraakman,
2001, pp. 455­6; compare generally Nottage, Chapter 2 in this volume). A
significant step in that direction was the enactment in 2002 of legislation
giving large corporations the option of adopting a US-style committee corpo-
rate ...