The size and composition of corporate boards in Japan

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Journal Article
Asian Business and Management, 2012, 11 (4), pp. 425 - 444
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We analyse the structure of corporate boards in Japan to determine whether they are matched to each firm's specific needs. Consistent with US findings, our results show that board size is positively related to firm size and firm complexity, and negatively related to monitoring costs. However, board independence appears to be unrelated to most firm characteristics. This suggests that Japanese boards are not optimally structured to carry out their role of advising and monitoring the firm. By closing their doors to outsiders and choosing to rely on their internal managerial resources, Japanese firms could be missing an opportunity to enhance their decision-making processes. © 2012 Macmillan Publishers Ltd.
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