What Makes Japanese Directors Tick
from May/June 2003
Simon Learmount, a professor at Cambridge University’s Judge Institute of Management and former Shinomura Fellow at the Development Bank of Japan, scored a rare coup when the members of the inside boards, or jomu-kai, of 14 Japanese companies invited him to ask questions about their private deliberations—and write about it. Although Learmount doesn’t reveal who said what, his recently published Corporate Governance: What Can Be Learned From Japan? (Oxford University Press, $65) does offer insight into how these directors perceive their jobs. Examples:
- Japanese directors feel a particular responsibility to shareholders who are also business partners.
- They rarely check into the financial standing of their business partners, lest that poison relations.
- Japanese directors see themselves as the connection between partnering companies, rather than between management and shareholders.
- They’re suspicious of stock options and sometimes see them as bribes.
- They believe that managing product development and relationships with customers is the crux of good governance.
- They concede that external threats tend to freeze their decision-making process.
