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Hirohiko Shimpo, IT Revolution and Corporate Governance in Each Country,
Minerva Shobo, 2001 (in Japanese).
 Chapter 1: IT Revolution and Corporate Governance in Each Country
Chapter 2: IT Revolution and Reorganization of Japanese Corporations
Chapter 3: Development of EU and European Corporations in Major Countries
Chapter 4: Economies and Business Activities in Peripheral European Countries
Chapter 5: Dispersed Latin American Economies and their Business Activities
Chapter 6: Development from New Settlement Regions to Developed Countries
and their Business Activities
Key Words: Three Forms of Corporate Governance around the World, Japanese Corporate
Governance, Market Oriented Corporate Governance, Institutional Investors,
Shareholder Activism.
Abstract
1. In the latter half in the 1990's, to escape the difficulties in individual
economies such as the Asian currency crisis and the Japanese lost decade,
the reform of corporate governance as well as major change in macro economic
policy, became indispensable. Consequently, corporate governance became
one of the leading topics in social science.
By the way, Berle, Adolf A. & Gardiner C. Means feature in the starting
point of this research. They clarified in definitive terms the way in which
the separation between ownership and control developed remarkably in American
companies during the interwar period. At present, there is considerable
discussion concerning the frequency of such characteristics in each country,
and the increasingly important role of institutional investors. As for
institutionalization, the globalization of the stock market, technological
innovation, expanding public companies and the enlargement of business
activities all lead to institutionalization.
2.It is the first subject of this book to explain the various characteristics
of corporate governance in each country.
When I explain in order of preparation, the 6th Chapter covers three countries
from nations of new settlements, where developed countries came from colonial
countries. In the 5th Chapter, meanwhile, I cover Latin American countries,
which advance a different form of industrialization from that found in
Asian countries. In Latin American countries, we can find typical corporate
governance in the industrializing nations.
In the 3rd and 4th Chapters, I cover European countries which advance European
integration, and examine individual issues, such as central Europe in the
3rd Chapter and peripheral Europe in the 4th. Some peripheral European
countries adopt the corporate governance in industrializing countries,
however, in continental Europe, just as in Japan, the corporate governance
of insider model is dominant.
Although Japan has maintained a high international status based on its
excellent manufacturing techniques, it has been unable to completely get
out of its lost decade. In the 2nd Chapter, I emphasize that one of the
most important factors is Japanese corporate governance. It is not inadaptable
for the period of global economy.
These examinations made clear that there are currently three forms of corporate
governance around the world as follows:
The first is the well known U.S. and British model. In these two countries,
company stock is widely dispersed and institutional investors who manage
and control play a major role. Financing and investing are performed directly
in a market, while information disclosure is also continually progressing.
Another industrialized country group is the second group; composed of continental
European countries and Japan. In this group, the development of the securities
market falls relatively behind, while the indirect financing from financial
institutions such as banks, is dominant, and the cross shareholding between
the major companies and financial institutions is developing. In the third
group of industrializing countries, companies are often under the control
or influence of specific stockholders, for example, the government, foreign
companies, Zaibatsu, etc., and the relationship between them has a wide
influence on overall economic activity.
3.These three forms of global corporate governance are beginning to change
under the new conditions of the IT revolution, often termed the 3rd Industrial
Revolution. The second objective of this book to attempt to find the direction
of that change. As for this subject, it was mainly covered in the 1st Chapter.
The existence of these various forms of corporate governance and the active
competition existing among them has stimulated the development of the world
economic system. When the scale and meaning of a global market were both
minor and the competition among companies took place within each country,
differences in corporate governance varied and such differences often contributed
to the economic pursuit for late-coming countries.
At the beginning of the 21st century, however, three forms of corporate
governance, including the 1st U.S. and British model, on an overall basis,
will strive to adapt to a form whereby shareholder value will be maximized,
the connection between companies and the market will be expanded, and companies
will compete more fiercely.
Along with the progress of the IT revolution, since the financial and securities
market strengthened the character of a global market featuring the increasing
participation of many companies and investors participate, if companies
maintain a closed form of corporate governance, they will lose the trust
of investors, their competitiveness will be weakened and their development
opportunity will be lost.
The institutionalization of market develops the role of institutional investors.
In the United States, institutional investors, for example, pension funds
submit the principles of corporate governance and make various requests
to corporations around the world. It is often called the shareholder activism.
The typical market oriented corporate governance, U.S. and British model,
will also evolve into a new form, where the influences of market and institutional
investors, etc. will become stronger than before. Moreover, the continental
European and Japanese model will approach that of U.S. and British model,
while the industrializing countries model will generally approach that
of continental European and Japanese Model. It is possible that some companies
will leapfrog them, and introduce a form of corporate governance more suitable
for shareholder capitalism. In the process of global competition, new original
forms of corporate governance in each country will also be formed.
The IT revolution has not only triggered technological innovation on a
global scale, equal to the Industrial Revolution, but a historical change
in terms of corporate governance.
4. The aforementioned research is the principal topic of my previous book
"The development of the world economic system and multinational companies".
In this book, I insisted that the formation of global network in multinational
companies played a major role in strengthening the connections of the world
economic system. As mentioned above, the development of the world economic
system has a decisive influence on the development of corporate governances
in each country at the same time.
Based on the above study, I am going to examine the development process
of corporate governances on the basis of individual countries, why their
present differences were formed and where they will proceed in future,
especially on historical examination of USA and Japan.
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