Corporate Governance in Germany, Japan, and the United States: A Comparative Study

Kenji Kojima

Kobe Economic & Business Review, 1993, vol. 38, 171-243

Abstract: Various systems of corporate governance have evolved in different countries. This paper examines the corporate governance in Germany, Japan, and the United States. It demonstrates the U.S. companies have tended to address hazards of self-interested behaviors among stakeholder by delineating the responsibilities of one to another, make the board of directors ensure the interests of shareholders, and resort to market for corporate control to correct failure of the board of directors. The effects of business relationships on German and Japanese corporate governance can help explain inactive market for corporate control in those countries. Japanese companies have established corporate governance with relationship-based control mechanisms to promote building and maintaining long-term business relationship. The board of directors in Germany provides effective safeguards against self-interested behaviors to consider interests of stakeholder to achieve the long-term corporate goals. Although there is some evidence that corporate governance in each country is converging, the significant differences may sustain.

Date: 1993
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