The interview presented the view that outside directors should prioritize shareholders’ interests and discussed solutions to the problem of dysfunction caused by their inability to express their views to the president. The focus is on how to bridge the gap between the institutional framework and actual practice.
Hosomizu (細水) said that outside directors should not be neutral and that the 2023 takeover guidelines of the Ministry of Economy, Trade and Industry explicitly state that they have a duty to stand on the side of shareholders. He indicated his view that many outside directors in practice behave like members of a community organization.
Ushijima (牛島) pointed out that while community organizations have positive aspects, an important rule is that shareholders should decide who becomes a member of management, and that there are cases where outside directors are not held accountable because they were not informed. He said that the fact that Japanese shareholders are rarely held legally liable is also one reason outside directors do not function effectively.
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