The lack of outside independent directors is simply a symptom of the underlying issue that companies are run by a tight group of people who have been in the company for decades.
Quote of the Day ( 3 )
Jamie Allen, secretary general of the Hong Kong-based Asian Corporate Governance Association, saying that the Olympus scandal could re-ignite debate on what critics say is a deep-seated weakness of Japanese management—a lack of strong independent oversight of boards that risks inefficient use of capital and gives shareholders’ rights short shrift. (Reuters)
Order by Time Order by Popularity
3 Comments
Login to comment
-1
pawatan
As opposed to the US or other countries where boards on large corporations seem to exist only to pay each other very large amounts of compensation - also giving the shareholders short shrift.
It's corruption any way you cut it.
1
wanderlust
pawatan - good point - Japan has a lot of cross shareholdings which no-one wants to upset; the US and others have a lot of directors sitting on the boards of each others companies, paying each those huge salaries which again no-one wants to upset, whilst firing workers to maintain shareholder value and their own salaries.
At the end of the day, it's their workers who get short shrift too...
-4
herefornow
pawatan -- nonsense. You know not of what you speak. Because, in the U.S., unlike in Japan, directors must be approved by the shareholders. So even a hint of corruption will get them dumped, because the funds that hold the stocks can't risk that kind of thing. As a result shareholders have real power in the U.S., unlike in Japan. And, wanderlust "to maintain shareholder value" is what directors are supposed to do. That is why they are elected by the shareholders. Except of course in Japan, which we all know is NOT a capitalist/free-market economy, but rather a semi-Socialist one. Japan's sytem lost its effectiveness when the bubble burst, and will simply drag the country down further and faster if not changed.
Back to top