Summit Notebook
Exclusive outtakes from industry leaders
Independent in appearance
Japan is edging towards the introduction of independent directors and auditors for publicly listed companies, but so far even the idea of having someone from outside at the top of a company remains a foreign concept.
The tradition is for someone to join a Japanese company at age 22 with the ultimate goal of serving on the company board, says Takeyuki Ishida, the head of Japan Research at RiskMetrics Group, which advises institutional investors on how to vote their shares.
Such a tradition of insider appointments means that even if the government requires companies to appoint at least one independent director or an independent auditor — as a recent government discussion report suggested — it might be a classic case of Japanese “tatemae” (appearance) rather than “honne” (substance).
A reluctant company, faced with such a requirement, might ask their friendly bank or accounting firm to find someone for them — and end up with an ex-staff member, Ishida told the Reuters Japan Investment Summit.
