This article covers the debate surrounding takeover defenses and corporate governance at Japanese companies. It focuses on the background to the ineffectiveness of outside directors and the possibility of introducing carrot-and-stick measures to make them effective.
This article examines whether companies’ takeover defenses and governance arrangements are fully capable of protecting shareholder interests, addressing the current state of and challenges facing corporate structures from an external perspective.
It particularly points to relationships in which outside directors find it difficult to speak up to management, identifying the balance of power between directors and management as a factor behind the dysfunction.
The proposal to introduce carrot-and-stick measures is at the center of the discussion as a mechanism for using external pressure to encourage corporate transformation.
From the perspective of examining the effectiveness of takeover defenses and governance, this discussion provides readers with material for considering the direction of future reforms.