Business Ethics and Corporate Governance, Second Edition

THE JAPANESE MODEL

This is the business network model, which reflects the cultural relationships seen in the Japanese keiretsu network, in which boards tend to be large, predominantly executive and often ritualistic.The reality of power in the enterprise lies in the relationships between top management in the companies in the keiretsu network. The approach bears some comparison with Korean chaebol.

In the Japanese model (Figure 14.3), the financial institution plays a crucial role in governance. The shareholders and the main bank together appoint the board of directors and the president.

The distinctive features of the Japanese corporate governance mechanism are as follows:

• The president who consults both the supervisory board and the executive ...