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🌏 | China Ant reorganizes into a financial holding company


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China Ant reorganizes into financial holding company

 
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The People's Bank said Ant agreed to improve corporate governance and "correct illegal financial activity in credit, insurance and wealth management businesses."
 

[Beijing XNUMXth Reuters] – The People's Bank of China (Central Bank) announced on the XNUMXth that Chinese fintech company Ant Glu ... → Continue reading

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Corporate governance

Corporate governance(English: Corporate Governance) Is corporate managementManagementdirected byThe mechanism to do.Ltd.in the case of,CompanyIs the owner ofShareholderIt is a system that manages and supervises whether or not the profits of[1]..The most commonly usedCompanyA corporate management system aimed at increasing long-term corporate value by comprehensively grasping the prevention of fraudulent activities and the improvement of competitiveness and profitability.[2].

How to implement the measures decided by the leaders is the operation, and how to manage and supervise the operation situationInternal control(Internal management / supervision), and also to examine whether the corporate system is functioning soundlyaudit(Internal auditとExternal audit(Divided into).Also, due to the speed of change in the business environment due to recent globalization, in a broad sense, our companyInternal controlNot only that, it may also refer to analyzing and dealing with the interests and risks given to the company by monitoring the economic situation of the external environment and the trends of partners.

Overview

back ground

資本主義In economic activity inLtd.The organization occupies a large position, and its activities are broader in terms of shareholders, consumers, employees, business partners, affiliated companies, creditors (banks, bondholders, creditors, etc.) who are the true owners of the corporation. Has a great impact on society as a whole, including local citizens.In particular, in recent years, companies have become huge and multinational, and their effects are extremely widespread, and proper and sound management of companies has become one of the major issues in the development of modern society.

Of particular concern in corporate governance are shareholders and other stakeholders who are diversified and divided in number.Stakeholders), The management team, who actually operates the company and knows the actual situation of its contents directly, is in a strong position, which makes it very difficult for the former to claim its legitimate rights and exercise them. The problem is that there is.Further complicating the matter, the aforementioned stakeholder objectives often conflict with each other.

For example, as a shareholder, maximizing the profits of a company is most desirable, but if profit is the only purpose of operating the company, the rights and welfare of consumers, workers, business partners, and even local residents will be impaired. It will be.Shareholders demand a short-term, high-risk management policy to raise stock prices, but banks and business partners demand the adoption of a low-risk, low-growth management policy because lending safety is paramount. Can be considered.

Furthermore, management may pursue expansion policies from the expansion of posts due to the expansion of companies, the increase in remuneration, or the sense of opposition to competitors, but this may be the pursuit of profitless expansion. ..Furthermore, if the president or chairman has tremendous power, not only will the management and decision-making of the company be carried out at the discretion of one individual, and the responsibility for incorrect management decisions will not be clarified and amended. In the case of maliciousness, management is carried out only to fertilize the personal desire of the individual,ScandalCan develop into.

In addition, since people outside the company are not directly involved in the operation of the company, the provision of information on the internal and actual conditions of the company basically depends on the company side.This "information asymmetry" not only hinders the exercise of rights of stakeholders outside the management team, but can also serve as a breeding ground for management in some cases.Minimizing these fundamental organizational problems and contradictions, companies can efficiently carry out their primary objective of "creating wealth" while meeting the demands of shareholders and other stakeholders, and the economy. The significance of corporate governance is to aim to be operated so as to contribute to the development of society.

1960'sAmericaSo, it came to be used in the context of "the unethical and inhumane behavior of companies should be deterred", and gradually window dressing etc.InvestorSeen fromCorporate scandalIt has also come to be used to mean what to do to prevent.Furthermore, the meaning of how to build a corporate organization to increase corporate value and shareholder value has also been added. In the United States from the 1980s to the 1990s,AcquisitionThe progress in the process and the increased voice of institutional investors have increased interest in corporate governance. Since the 1990sEuropeIn many countries and Japan, as many corporate scandals have been discovered and economic maturity or stagnation continues, corporate governance has attracted attention (⇒).#history).

the purpose

Currently, the purpose of corporate governance is said to be two points: (1) to prevent corporate scandals and (2) to strengthen the profitability of companies.In addition, there are discussions from the perspective of society as a whole and discussions from the perspective of investors (⇒).#Purpose of corporate governance).

And for that, variousLegal system, Institutions within the organization, and informal practices.These can be broadly divided by nature: organizational corporate governance conducted through top management organizations, market-based corporate governance conducted through the securities market, and economics for managers.IncentiveThere is a way to give (⇒#Corporate Governance Method).

However, in designing and implementing such systems and practices for corporate governance, various stakeholders such as shareholders, creditors, employees, etc. (Stakeholders) There are scenes where the interests conflict.For example, the right of a new shareholder to change management through a takeover is part of an important market-based corporate governance scheme, but is opposed by employees who think they own the company. May be invited.This raises the question of who is the sovereign of corporate governance.This has been replaced with the question "who owns the company" and has caused a lot of controversy (⇒).#Sovereign of corporate governance).

History

Development in America

The term "governance" or "governance" came to be used for companies.1960 era OfAmericaMet.Vietnam anti-war movementInNapalm bulletCriticism of manufacturing,Civil rights movementCriticism of Black Employment Discrimination in the Consumer Sovereignty MovementGeneral Motors (GM)MonopolyCriticism of car design mistakes, and in various placesPollutionIt is believed that these terms were used in view of the criticism of the problem and the deterrence of corporate unethical and inhumane behavior through government intervention.[3].

1970 eraIsOil shockAnd in the recession that followedRichard NixonIllegal donations to the Presidential Re-election Commission,Lockheed caseEtc. of the companybribery・ Unauthorized donation cases were discovered one after another.At the same time as governance issues as social ethics issuesPenn Central RailwayIn the event of bankruptcy or the financial crisis of Lockheed AircraftFinancial results,Insider tradingWas discovered, and governance issues from the investor's point of view began to be questioned.[4].

1980 eraOn a large scale in the United StatesAcquisition (M & A) is progressing, and the management of the companyStock marketBecame at risk of hostile takeovers.On the other hand, many companies have taken takeover defense measures such as (poisonous drug clause) to prevent hostile takeovers, which allows management to cling to their position for their own benefit. It could hurt the interests of shareholders.[5].

Under such circumstances, since the 1980s1990 eraOver the pension fund, etc.Institutional investorHas played a major role in corporate governance. 1974Employee Retirement Income Security Act(ERISA Law) stipulates the responsibility of pension managers.Also in 1988Ministry of LaborWas entrusted with asset managementInstitutional investorWas advised to exercise the voting rights of the companies under operation on behalf of the consignor.As a result, institutional investors such as pension funds have become strongly aware of the increase in shareholder value when managing stocks, and have come to make strong demands on companies to improve profits.Under the pressure from such a market, American companiesRestructuring(Corporate restructuring) has progressed, and since 1990, many companies have passed a resolution at a general meeting of shareholders to abolish the poison pill.In addition, in the early 1990s, GM,IBM,American ExpressBy outside directors with investor support in large companies such asCEOThere was also an incident in which he was replaced.In this way, in the United States in the 1990s, a corporate governance system was established through the activities of institutional investors and outside directors.[6].

Currently, institutional investors who are actively placing orders on corporate governance of companies and have a leading positionCalpers(California Civil Service Retirement Pension Fund).CalPERS is a company with performance problems under the basic policy of nurturing investee companies as a long-term stable investor.Investor Relations (IR) We are promoting the improvement of corporate governance by contacting departments to identify problems and disclosing the names of companies that are believed to have not undergone management reforms.[7].

International spread

Since the 1990s, not only in the United StatesThe United Kingdom,Germany,FranceSuch as European countries,JapanHowever, the issue of corporate governance has come to the fore.

In such a situation,Economic Cooperation Development Organization At the request of the Ministerial Council in 1996, the (OECD) established an Economic Advisory Group on Corporate Governance to address international corporate governance issues.The Economic Advisory Group, which consists of six members from the United States, Europe and Japan, reported to the OECD entitled "Corporate Governance: Improving Competitiveness and Capital Entry in the Global Market" after discussions by management practitioners. Submitted[8]..In light of this, the OECD set up a special project team in April 1998 to develop the "Corporate Governance Principles", which was approved by the Ministerial Council in May 4.This principle is the first principle on corporate governance created under the initiative of intergovernmental organizations, and although it is not binding, it is expected to be used as a standard (benchmark) by governments and the private sector.There is not only one model of desirable corporate governance, but what is common to desirable corporate governance is that the interests of shareholders are the highest priority, and (1999) protection of shareholder rights, (5) Fair treatment of all shareholders, (1) recognition of stakeholder rights and participation in corporate governance, (2) disclosure of information and ensuring transparency, (3)board of directorsShows the five principles of responsibility and the recommendations that embody them.[9].. In 2004, the "Revised Corporate Governance Principles" was announced, which was strengthened in response to changes in social conditions.[10].

World BankAnd the OECD signed a "Memorandum of Understanding on the Establishment of the Global Corporate Governance Forum" on June 1999, 6, starting with the OECD Principles on corporate governance by the governments of OECD member and non-member countries. Confirmed to expand dialogue and cooperation for reform[11].

Institutional investors have also begun to collaborate internationally to strengthen corporate governance due to the increase in cross-border investment. In 1995, the International Corporate Governance Network (ICGN) was organized by institutional investors in the United States and other countries.[12]..Then, in July 1999, we adopted the Global Corporate Governance Principles, which are the minimum standards accepted by companies and investors around the world and are common foundations, but are further expanded.[13].. The network convention was held in Tokyo in July 2001, which also influenced the movement of corporate governance in Japan.[14].

However, the actual form of corporate governance differs depending on the corporate legislation of each country, the capital structure of the company, and long-standing practices.In Japan, during the high growth period,Japanese managementA unique corporate practice called is formed, whereMain bankIt is explained that Japanese-style corporate governance was carried out by the main bank, but it has also been pointed out that it has become dysfunctional due to the weakening of corporate oversight by the main bank, and many Japanese companies have changed their corporate governance. Is exposed to the request for (⇒Japan).

Task

In the United States, in December 2001EnronCompany, in July 2002World comThe bankruptcy of the company and the discovery of a large amount of window dressing broke confidence in the US capital markets and increased distrust of accounting, auditing and corporate governance.In response to this, as a reform covering the three fields of accounting, auditing, and governance, in July 2002,Sarbanes-Oxley Act(SOX Law) was enacted.Also in Japan, it was discovered in October 2004Seibu Railway"Shareholder situation" misrepresentation problem and subsequentKanebo(September 2005),Live doorIn response to the problem of false statements in the securities report (January 2006), it is also called the Japanese version of the SOX Act in June 1.Financial Instruments and Exchange ActWas established[15]..In this way, the demand for strengthening corporate governance is still increasing.

Purpose of corporate governance

Kikusawa (2004) considers the debate over corporate governance as (1) ethical issues or efficiency issues, and (2) broadly society as a whole (diversified).Stakeholders) Is a problemShareholder,a creditor such asInvestorClassify according to whether it is regarded as a relationship between the company and the company, and organize as follows[16].

Sorting out corporate governance issues
Corporate and social issues (governance issues in a broad sense)Corporate and investor issues (governance issues in the narrow sense)
Ethical issuesSocial ethics issues (legitimacy issues)Corporate ethics issues (legitimacy issues)
Efficiency problemSocial efficiency problem (problem of national economic policy)Corporate efficiency problem (corporate policy problem)

What began to be asked in each country from the 1960s wasPollutionHowever, the issues that are gradually asked as corporate governance issues are corporate ethics issues (prevention of corporate scandals), corporate efficiency issues (improvement of corporate value and business performance), or a combination of both issues. It is pointed out that it has moved to[17].

On the need for corporate governance, in economicsPrincipal = agent theory(Agency theory) explains as follows.That is,Ltd.InSeparation of ownership and managementShareholders do not manage directly, but delegate management to the management.In such a relationship between a client (principal) and an agent (agent), the interests of both do not necessarily match (mismatch of interests), and the information they have is not the same (information asymmetry). Therefore, the agent ignores the interests of the client and pursues his own interests.Moral HazardMay occur.For example, managers pursue their fame and invest in inefficient businesses to set up luxury offices, hire unnecessarily large numbers of employees, and give posts to their subordinates. There is a possibility that it will happen.Therefore, in order to solve such problems, corporate governance is required as a system for monitoring and disciplining the management who is the agent so that the interests of the shareholders who are the clients are protected.[18].

However, such a principal-agent relationship is not only between the management and shareholders, but also with the management.a creditor,Employee, Customers, traders, etc.StakeholdersIt also occurs with (stakeholders).Therefore, corporate governance is, in a narrow sense, a "problem of companies and investors (especially shareholders)", but in a broad sense, it is regarded as a "problem of companies and society" to protect the interests of all of these stakeholders. It is also possible[19].

Corporate Governance Method

According to agency theory, in order for shareholders to deter management's unethical or inefficient behavior, they either align their interests with management or mitigate the asymmetry of their information. There is a need.Of these, the relaxation of information asymmetry is mainlyCorporate accounting(Financial accounting), And the subject of corporate governance is mainly aimed at aligning the interests of shareholders and management.The methods are classified as follows:[20].

  • How shareholders use some kind of system to govern management (monitoring system)
    • Organizational corporate governance
    • Market-based corporate governance
  • To the managerIncentiveHow to give and self-govern (incentive system)

Organizational corporate governance

Organizational corporate governance is a method of governance through top management organizations.

ShareholdersGeneral meeting of shareholdersTherefore, it is possible to dismiss a manager who is not in the interests of shareholders and appoint a new manager.

In addition, management such as directors tells the companyDuty of care-Fidelity obligationIf you incur damage to the company on the contrary,Restitution for DamagesBe obliged.Then, a system that allows shareholders to claim damages against directors, etc. on behalf of the company,Shareholder representative lawsuitThat is.The threat of shareholder derivative suits threatens directors, etc.board of directorsIs said to be creating pressure to have serious discussions[21]

Market-based corporate governance

What is market-based corporate governance?Stock market(Stock market) Is the governance.

If the business performance of the manager is poor and no profit is generated, the number of shareholders who sell the stock in the market will increase, and the stock price will fall or stagnate.If the stock price is sluggish,Issuance of new sharesIt will be difficult to raise funds through (capital increase), and since a decline in stock prices will mean a decline in credit, it will also be difficult to raise funds through borrowing.Therefore, a fall in stock prices puts pressure on management to refrain from acting against the interests of shareholders.[22].

If the management still does not change the management, the acquisition () Threats will play a major role in corporate governance.

Granting incentives

As a system that gives incentives to managers,stock optionThere is.This allows you to buy a certain number of shares at a certain price as a reward to the management.Stock acquisition rightThe aim is for the management to carry out management that constantly raises the stock price.[23].

However, as seen in the Enron and Worldcom cases, it has been pointed out that stock options are rather helping to maintain and raise stock prices through fraudulent accounting.[24].

Sovereign of corporate governance

Of corporate governanceSovereignThe question of who (who governs the company) is"Who does the company (company) belong to?"It has been replaced with the question, and has caused a lot of controversy in Japan and other countries.

Company lawAbove is (1) InvestorShareholder DirectorHas the right to appoint and ultimately controls the operation of the business, and (2) the profits generated by the activities of the business belong to the shareholders.Ltd. OfownerIs interpreted as a shareholder[25]..However, in the actual image of corporate ownership, who is recognized as the owner / sovereign of the company is not always uniform, and in response to the fact that shareholders exercise the right to appoint directors in situations such as hostile takeovers. There may be a feeling of resistance.

In the United States, many people have the image that a company belongs to its shareholders.On the other hand, in Germany, companies have a strong image of dual ownership of shareholders and employees, and in Japan, they have a strong image of multiple ownership of employees, shareholders, customers, and society as a whole. It is said that many people think that it belongs to employees. In a questionnaire survey conducted in the early 1990s targeting managers and managers of Japan, the United States, Britain, France and Germany, the proposition was that "the owner of a company is a shareholder. Shareholder interests should be given top priority." The following table shows the percentage of managers and managers who answered affirmatively to each of the propositions that "the company exists to promote the long-term profits of all interested parties."[26].

Corporate ownership image of each country
United States flag The United States of AmericaGerman flag GermanyJapanese flag Japan
Shareholder76%17%2.9%
All stakeholders24%83%97%

Behind the creation of a unique image of employees owning a company in Japanlifetime employment-SeniorityThere is a Japanese-style employment practice.Under Japan's seniority wage system, employees are youngProductivityYou will only receive lower wages, and in return you will be paid higher than productive wages in return, eventuallySeverance payIt is settled in the form of.This deferred wage system forces employees to make "invisible investments," that is, to invest in their own human capital formation.Therefore, it has been pointed out that employees need to recover their investment by working for the same company for a long time, and it is inevitable that employees will have a sense of ownership of the company.[27]..This way of thinking is the acquisition of companies in Japan (especiallyHostile takeoverIt also leads to a strong allergy to)Prince paper OfHokuetsu Paper MillIn a questionnaire to business owners conducted in response to the failure of a hostile takeover against Japan, many respondents said that hostile takeovers did not take root in Japan because they were "not familiar with Japanese culture."[28].

In response to this corporate image, it began to be claimed in Japan in the latter half of the 1990s.Core employee sovereignty theoryMet[29]..This means that the company is a "core employee", that is, an employee who commits to the company in the long term (including a manager elected from among the employees).part,(I.e.Is not included).The reasons are as follows: (1) Core employees contribute more to corporate competitiveness than shareholders and are more scarce (they have company-specific technology and knowledge, and are less substitutable). , (2) Core employees have a stronger commitment to the company and are longer (with the intention of continuing to provide resources for a long period of time), (3) Core employeesBonusThe risk of reflecting business performance inbankruptcybyDismissalWhile bearing the heavy risk of, the risk of shareholders can be mitigated by diversified investment.[30].

In contrast,Shareholder sovereignty theoryFrom (1)Added valueIt is not always appropriate for the person who contributes most to the formation of the company to monitor the company-if an employee is a player of a team, if the player chooses a manager (manager), the player will be the manager of that manager. There is an incentive to prioritize "whether the director will use me" over the possibility of winning below, so it is necessary to monitor it from the outside--, (2) (a) Stocks only in the short term Even shareholders who do not own the stock buy and sell stock in anticipation of long-term profits and stock prices, and (b) the strong commitment of employees to the company is rather an excessive expansion of market share. OrDiversificationWhile working in the direction of seeking more posts by, while making it difficult to withdraw from unprofitable departments to secure employment and delaying corporate transformation, (3) (a) In fact, employees receive the first distribution from added value. Shareholders cannot receive distribution unless they remain after distribution to employees and creditors. (B) For the risk of dismissal, an extra retirement allowance system is provided to compensate for the decrease in lifetime wages due to dismissal. It is argued that it is possible to maintain the motivation of employees to acquire skills by establishing it, and that it is the role of the government to protect the employment of the whole country.[31].

However, it has been pointed out that the extreme debate about "who owns the company" is misleading.From the standpoint of shareholder sovereignty, if employees are not paid a fair amount of compensation, their motivation to work will decrease and the added value created will also decrease. It is said that it is necessary to properly evaluate and distribute added value, and it is considered that shareholders are not the only ones who insist on taking full advantage of the company's results.[32].

Corporate governance of each country

The United States of America

In American companiesGeneral meeting of shareholdersAppointed byboard of directors Whereas (board of directors) play a governance roleCEO(Chief Executive Officer) etc.Corporate Officer (officer) executes business, and supervision and execution are separated.However, although Calpers wants to separate the CEO and the chairman of the board, in reality there are many large companies where the same person concurrently serves as the CEO and the chairman of the board.[33].

The board of directors usually has various committees such as a nominating committee consisting of several directors, a remuneration committee, a management committee, and an audit committee, and the planning work and audit work are delegated to these committees. Be done[34].

New York Stock Exchange (NYSE) requires listed companies to have a majority of directors and that all members of the Corporate Governance Committee, Compensation Committee and Audit Committee are independent directors.[35].. In many companies, all directors except the CEO are independent directors.[36].

The United Kingdom

The United KingdomSo, since the early 1990s, there has been a lot of interest in corporate governance.The distrust of general investors has increased due to the discovery of a huge amount of fraudulent accounting directors, such as the Maxwell case in which the management diverted the employee pension fund.In response to thisThe cityThe leaders set up a committee three times to discuss the ideal form of corporate governance.The first committee was the "Committee on Financial Aspects of Corporate Governance" (Cadbury Committee), chaired by Sir Adrian Cadbury.London Stock Exchange, British Industry Federation,Bank of EnglandEstablished with the support of organizations such as the British Board of Directors.A report published by the Commission in 1992 states that it is not desirable for the Chairman and CEO of the Board to serve concurrently, and that an effective committee on auditing, compensation and nomination should be established below the Board. Was to propose[37].

After that, the Greenbury Report was submitted in 1995, and the Hampel Report and Integrated Codes were submitted in 1998, showing the principles of corporate governance.[38]..In response to these reports, the London Stock Exchange (LSE) has established the best practices (best practices) that listed companies should respect, and if they do or do not comply with them, they do. It requires that the reason be disclosed in each year's annual business report.However, this is a self-regulatory rule with no penalties.[39].

In the United Kingdom, as in the United States, the board of directors selects a CEO and monitors business execution, playing a central role in corporate governance, and is collectively called Anglo-Saxon corporate governance.However, it differs from the United States in some respects.In British companies, it is now common for another person to be the chairman and CEO of the board.On the other hand, the majority of the board of directors are from within the company.Institutional investors rarely exchange opinions with management under the hood and take openly conflicting actions with management.Instead, organizations such as the Pension Fund Association (NAPF), which advises pension fund managers on exercising power of attorney, and PRO NED, which promotes and supports the hiring of outside directors of companies, are large in terms of corporate governance. Playing a role[40].

Germany

German corporate governance

Germany OfInc. (AG)Then, by law, the board of directors (Verwaltungsrat) Audit & Supervisory Board (Aufsichtsrat)And below itExecutive Board (Vorstand)It is divided into two layers (in English, this system is two board system ).Also,Stock joint stock company (KGaA) and more than 500 employeesCo., Ltd. (GmbH)The Board of Directors and Executive Board will not be established, but the Board of Corporate Auditors will be established by law.The Board of Corporate Auditors is the highest decision-making body for management, supervises management, and appoints executive officers.Executive officers execute business in accordance with the basic strategies and plans established by the Board of Corporate Auditors.Both officers cannot serve concurrently[41]..And, according to (Mitbestimmungsgesetz), in large companies with more than 2000 employees, half of the corporate auditors are elected by shareholders and the other half are elected by employees (workers).[42].

In fact, it has a great influence on German corporate governance.bankIs.The capital structure of German companies is traditionalIndirect financingHighly dependent on[Annotation 1]..Looking at the shareholding ratio, the ratio of large companies is highHoldingWhile forming the structurePension fundThe shareholding ratio is extremely low.Although the shareholding ratio of the bank itself is low at about 10%, the bank has (1) deposit / lending business, (2) underwriting / selling of securities, and (3) securities.DepositThere is a system to do business, and non-financial companies that purchase shares through banks can directly transfer the shares to the bankVoting rightsIs often deposited.As a result, banks have had a great influence on companies as large creditors and as shareholders exercising 50% to 55% of voting rights.EspeciallyDeutsche Bank,Dresdner Bank,Commerz BankThe three major universal banks have a dominant position, and have sent in corporate auditors elected by shareholders, especially the chairman of the board of corporate auditors, to monitor management.In addition, Universal Bank has taken control of the personnel affairs of the Executive Board, especially the Chairman of the Executive Board.[43].

But in 1990East and West Germany unificationLater, the economy was confused and many corporate scandals were discovered.Huge loss due to speculative investment by Germany's largest mining and metal company Metal Gesellschaft, huge window dressing by Klekner Humboldt Germany, bankruptcy due to fraudulent speculation by Germany's largest real estate company Schneider, Mannesman's back office[44]..These incidents raised questions about the governance capabilities of universal banks.For example, the corporate auditors dispatched from Universal Bank often concurrently serve as corporate auditors of 10 or more companies, the board of corporate auditors is often held only twice a year, and the board of corporate auditors is an executive officer. It was pointed out that it depends on the information provided by the association.In addition, German companies have also been listed on the US stock market in search of funds, increasing their capital adequacy ratio.[Annotation 2], American-style accounting system and information disclosure are required[45].

Corporate governance reform

Under these circumstances, corporate governance reforms have begun. April 1998, "Law on Corporate Control and Transparency" (KonTraG) Was enforced and the following reforms were carried out[46].

  • The Executive Board shall regularly report the management plan, financial plan, and personnel plan to the Board of Corporate Auditors.
  • Up to 10 companies can concurrently serve as corporate auditors, and up to 5 companies can concurrently serve as chairman of the board of corporate auditors.Candidates for Audit & Supervisory Board Members shall disclose the status of concurrent posts and report to the General Meeting of Shareholders.
  • Mandatory to hold the Board of Corporate Auditors at least four times a year
  • Allow stock option plans and therefore buy back shares
  • Require financial institutions to disclose their shareholding status and members of the Board of Corporate Auditors

Also, in July 2000Gerhard SchroederThe "Corporate Governance, Corporate Management, Corporate Management, and Stock Law Modernization Committee" established by the Prime Minister submitted a report in July 2001 and formulated a voluntary corporate governance code with the following contents. And proposed reform of the information disclosure / accounting reporting system.[47].

  • The scope of reporting obligations of the Executive Board to the Audit & Supervisory BoardLinkExpanding to the management of the target company
  • Expanding the scope of audits by the Board of Corporate Auditors to subsidiaries and consolidated companies
  • Up to 5 companies can concurrently serve as corporate auditors

In response to thisGerman Ministry of JusticeThe "Corporate Governance Code Development Committee" established by the "German Corporate Governance Code" (2002)Deutscher Corporate Governance Kodex), And made the following recommendations and recommendations[48].

  • The Executive Board shall regularly report the current status of the strategy to the Board of Corporate Auditors.
  • The Executive Board shall obtain the consent of the Board of Corporate Auditors in advance for decisions on important management matters.
  • The remuneration of the Board of Corporate Auditors shall be determined by the Board of Corporate Auditors and stock options shall be used as remuneration for executive officers.
  • The Executive Board has important mattersインターネットPromptly disclose to shareholders using such means
  • Should be disclosedConsolidated balance sheetIs allInternational Accounting StandardTo create according to

Japan

2016As of April, in Japan2015In 3 monthFinancial Services AgencyとTokyo Stock ExchangeThe "Corporate Governance Code" is the corporate governance policy.ThisOutside directorAim to strengthen the check function of corporate governance, such as making the dispatch of temporary staffing mandatory.

History

Originally, in Japanese corporate management, companies buy stocksStock marketThe act of listing on the stock company and converting it into a joint-stock company was regarded as a means of raising long-term funds on the management side.Since preventive measures are taken to prevent the company from being hijacked by cross-shareholding shares to be disclosed to affiliated companies, business partners and banks, it is not possible that the management rights will be transferred to shareholders by going public, but also the shareholders. However, it was recognized that the true owner of the company was nothing more than a premise.

In Japanese-style management, the division and dualization of the board of directors and management, which represent the rights of shareholders, which should be the most important in corporate governance, are often actually unified in terms of operation.Of the board of directorsboard of directors) The chairman, president (director), managing director (director), managing director (director), etc. are considered to be part of the career advancement in the position of a company, and there is almost no separation from the position at the manager level.This is for many Japanese companiesDecision makingIt has been pointed out that it obscures the process. Cases such as "asking two or more people for the same judgment" are common in Japanese companies, and there are many cases where the roles of supervision and execution of the management system are not clearly delineated.

Anglo-SaxonIn the governance of affiliated companies, outside directors who occupy an important position as a spokesperson for the rights of shareholders are often selected as outside directors of the company based on the opinions of institutional investors, etc., but in Japan, outside directors are selected. In many cases, there are no directors who do not exist or whose actual duties are to clearly represent the opinions of shareholders because they are selected from related parties in the same group (main banks, affiliated companies, etc.).It should also play a role in ensuring the accuracy of the company's financial statements on behalf of shareholder rights.Statutory AuditorIn addition to the selection fee paid by the management for both internal and external audits, JapanAccounting standardsIn many cases, it does not reflect the inside of the company, partly because it is ambiguous.For this reason,Bubble burstIt often happened that many companies later went bankrupt suddenly while hiding huge losses.

Japan from the 1960s to the 1970sHigh economic growthAchieved.The management method used there is very different from the management method of developed countries in Europe and the United States.Japanese managementIt was noticed as.The pillars can be summarized in the following four points.[49].

Under such Japanese-style management, the companies that we own become cooperative and stable "silent shareholders" who do not intervene in the management of the other company.General meeting of shareholders TheextortionistIt had become a mere ghost to deal with.Also,board of directorsAlso practicallyThe presidentIt was composed of internal officers selected by the company and was not in a position to supervise or criticize management.Instead, it is said that the main bank, which is the lender bank with the largest loan amount and is also a major stable shareholder, had a close personal relationship such as dispatching officers to the company and played a role of monitoring the company. ..

Banks have contributed to the sound development of companies by putting a lot of effort into examining the soundness of companies and the profitability of investments when lending to companies.In addition, the main bank does not directly interfere with management or sell stocks in normal times, but if a company falls into a slump, the company's transaction settlement account will be concentrated on its own bank.Cash flowIn the event of a further crisis, he tried to rebuild and relieve the company in all forms, including emergency loans, debt waivers, and human support.The monitoring of companies by such main banksJapanese-style corporate governance systemWas thought to be[50]..In addition, influential people in the group monitor the companies in the group, employees and labor unions in the group monitor the management, government regulations and industry groups "private-private regulations" are also types. Allegedly played a role in corporate governance[51].

But from the 1980s to the 1990s, in the financial worldDeregulationMovement ofWorld economyGlobalization,IT revolutionThe environment surrounding the management of Japanese companies has changed drastically.Under such circumstances, the dismantling / dilution of corporate groups and the elimination of ownership have progressed.In addition, while abundant deposits from corporations and individuals flow into banks, the demand for funds from companies has shrunk, putting banks in a vulnerable position to sell ancillary services to companies and having a strong ability to monitor companies. lost.In addition, government authorities are also in the financial industryConvoy systemWhile continuing the protective competition restrictions symbolized by the OBdictateAs a result of the collusion with the companies that accept the company, it was not possible to take strong measures against the companies, resulting in the loss of competitiveness of the companies.Loose corporate accounting principles and limited information disclosure enabled long-term and flexible management, but allowed them to mask management failures and became a hotbed for window dressing.[52].

It was this impasse of Japanese-style management that became apparent.Bubble economyIt was in the 1990s after the collapse of.It turns out that major banks were unfairly lending during the bubble economy, which was a large amountBad debtAnd for its processingPublic fundsWas injected[Annotation 3]..It was also found that most companies provided profits to the Sokaiya.[Annotation 4]..In addition, frauddividend, Illegal accounting, window dressing settlement was also discovered[Annotation 5]..In response to the frequent occurrence of corporate scandals, the concept of corporate governance came to the forefront in the 1990s from the perspective of who should govern a company and how to prevent it from occurring.[53].

At the same time, after the burst of the bubble economy, the Japanese economyLost ten yearsSince it became impossible to get out of the long-term stagnation called, corporate governance has also attracted attention from the perspective of what to do to improve the efficiency and profitability of companies.[54].

1994 years,NGOThe Japan Corporate Governance Forum was established, and in May 1998, it announced "Corporate Governance Principles: Thinking about New Japanese-style Corporate Governance (Final Report)".This final report made recommendations on the governance of Japanese companies, including reforms of the board of directors (introduction of outside directors, separation of the board of directors and executive board, etc.) and expansion of disclosure (information disclosure).[55]..Around this time,SonyMany companies have reformed the board of directors, including the introduction of an executive officer system.Regarding this, there are opinions that the actual management system has not changed in many cases and that the introduction of outside directors has not progressed, and that there is a delay in corporate governance in Japan.[56]..On the other hand, at the same time as the cross-shareholding progresses,CalpersPublic pension funds such as these have begun to acquire shares in cheaper Japanese companies.Since these foreign shareholders are demanding shareholder-oriented management and reforms in line with the above governance principles, Japanese companies are inevitably forced to reform corporate governance with an investor in mind.[57].

Changes in the four governance areas of sustainability, strategy / risk / audit, nomination / human resources, and compensation required to renew the traditional Japanese corporate governance system are required.In order to respond to these social conditions, new movements are becoming active, such as a new company funded by Mega Bank providing consulting guidance.[58]

Governance regulation of corporate law

2005,TraditionalCommercial lawIntegrated company edition, etc.Company law(Law No. 17, July 7, 26) enactedAnnounceWas done on May 2006, 5EnforcementWas done.There, (1) allLarge companyAgainstInternal controlIs part of the systemSystem for ensuring proper business operationsMandatory to determine the basic policy of construction, (2)General meeting of shareholdersInDirectorIt is assumed that the dismissal resolution requirements will be relaxed from special resolutions to ordinary resolutions, and (3) mainly used by small and medium-sized enterprises.TreasurerMeasures have been taken to ensure corporate governance, such as the establishment of a new system[59].

Under the new Companies ActLtd.Is a top management organization, (1) conventionalCompany with Board of Directors, (2)Company with Committee, (3) Three types of configurations can be selected for companies with non-boards of directors[60].

Traditional board company
board of directorsMade management decisions and was elected by the board of directorsCEOIs a form that represents the company externally while executing business.Routine business execution is often entrusted to the representative director[61].
As a general rule, as an organization that conducts accounting audits and business auditsStatutory AuditorIs placed (Company Law Article 327Item 2).In response to requests for strengthening corporate governance, the independence of corporate auditors has been strengthened through frequent revisions to the Commercial Code.However, it has been pointed out that in reality, corporate auditors are selected by the management from among those from within the company, so they do not have the power to monitor the management and their contribution to corporate governance is limited. ing[62].
Company with Committee
Following the American-style top management organization, a nominating committee, an audit committee, and a compensation committee are set up, and supervision and execution are separated.The authority of the board of directors is to determine basic matters, select and supervise committee members, andExecutive officerLimited to the appointment and supervision of, executive officers execute business,Representative Executive OfficerRepresents the company externally.Business decision-making is also largely entrusted to executive officers. As of December 2008, there are about 20 companies.[63].
Company with non-board of directors
oldLimited companyIt is a form that generally inherits the institutional design of the company, and each director executes the business (if there are two or more, the business is decided by a majority), and each director represents the company externally (however, a representative director is appointed). be able to)[64].

Corporate information disclosure system for governance

2003 (Heisei 15)Cabinet Office Ordinance() Due to revisionSecurities registration form-Securities reportThe item "Corporate Governance Status" has been added to "Corporate Information: Status of Submitting Company", and the submitting company can now disclose its efforts regarding corporate governance.[65].

Tokyo Stock ExchangeIn March 2004, to enhance corporate governanceListingThe composition of the OECD Corporate Governance Principles aims to provide a common understanding base for the need for the voluntary efforts of the company and the evaluation of shareholders and investors to be carried out together. While complying"Listed Company Corporate Governance Principles"Was formulated[66]..In addition, the exchange has been open to listed companies since the fiscal year ended March 2003, 3.Financial statementsWas requested to describe "the basic concept of corporate governance and the implementation status of its measures", but in March 2006 (Heisei 18), it was separated from the financial statements."Report on Corporate Governance'Will be requested to disclose[67][68].

In addition,Ministry of Economy, Trade and IndustryThe "Study Group on Disclosure and Evaluation of Corporate Behavior" established in Japan is a guideline that companies should refer to when establishing and disclosing corporate governance and risk management / internal control on August 2005, 17. As an interim report, "Corporate Governance and Risk Management / Internal Control Disclosure / Evaluation Framework-Guidelines for Construction and Disclosure-" was published.[69].

2006, The law to partially revise the Securities and Exchange Law (Law No. 18 of June 6, 14) was enacted and promulgated, and the main body of the revised law was enforced on September 65, 2007. The transaction law isFinancial Instruments and Exchange ActI changed the title to.The Financial Instruments and Exchange Act regarding internal control over financial reportingInternal control reportThe disclosure has been expanded, such as requiring the submission of.The internal control reporting system under the Financial Instruments and Exchange Act is considered to be interrelated and influential with internal control as a corporate governance regulation of the Companies Act.[70].

2015In March, the Financial Services Agency and the Tokyo Stock Exchange officially decided on the "Corporate Governance Code."[71], The application of the same code started on June 6st.

footnote

[How to use footnotes]

注 釈

  1. ^ For example, in the case of the West German manufacturing industry, according to data from the 1980s, the debt ratio was around 70% and the equity ratio was around 30%.Kikusawa (2004: 55).Source: Bank of Japan "International Comparative Statistics 1992".
  2. ^ In 1996, the capital adequacy ratio in the German (after reunification) manufacturing industry was 50.4% and the debt ratio was 49.6%.Kikusawa (2004: 61).Source: Bank of Japan "International Comparative Statistics 1999".
  3. ^ Sumitomo Bank OfItomanUnauthorized lending to (1990),Fuji BankFake deed case, etc.The Industrial Bank of JapanからNui OnoueHuge loan toToyo Credit BankThe case of issuing a huge fake deposit certificate (1991) was revealed.Tamura (2002:10).
  4. ^ ,FujikoshiAdhesion of Sokaiya (1990), 4 major securities companies,Heiwado(1991 years),Takashimaya(1996 years),Ajinomoto, OldDaiichi Kangyo Bank,Matsuzakaya,日立,Toshiba,Mitsubishi Estate(1997 years),Asahi Glass,Japan AirlinesIt was discovered that profits were provided to the general assembly shop (1998).Kikusawa (2004: 30-31).
  5. ^ Hail Nitto, Macross window dressing board (1991), Ipek window dressing board (1992),Ninoshingumi case(1995), Mita Kogyo's window dressing accounting (1998), etc. were discovered.Kikusawa (2004: 31).

Source

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  2. ^ Japan Business Federation"About the Corporate Governance System in Japan" June 2006, 6
  3. ^ Kikusawa (2004: 12-14).
  4. ^ Kikusawa (2004: 15-17).
  5. ^ Kikusawa (2004: 17-19), Tamura (2002: 28-29).
  6. ^ Kikusawa (2004: 17-20), Tamura (2002: 25-32).
  7. ^ Tamura (2002: 33-36).
  8. ^ Hirata (2001: 278).
  9. ^ Hirata (2001: 285-91).
  10. ^ "Revised OECD Corporate Governance Principles”. OECD Tokyo Center (April 2004, 4). 2009/5/13Browse.
  11. ^ Hirata (2001: 291).
  12. ^ Tamura (2002: 46).
  13. ^ Hirata (2001: 291).
  14. ^ Tamura (2002: 46).
  15. ^ Machida (2008: 66-69).
  16. ^ Kikusawa (2004: 10-12).
  17. ^ Kikusawa (2004: 33-35).
  18. ^ Iwata (2007: 43-45), Kikusawa (2004: 39-41).
  19. ^ Kikusawa (2004: 41-42).
  20. ^ Kikusawa (2004: 43-45).
  21. ^ Tamura (2002: 178-80).
  22. ^ Iwata (2007: 45-46), Kikusawa (2004: 43).
  23. ^ Kikusawa (2004: 45).
  24. ^ Kikusawa (2004: 54).
  25. ^ Kanda (2009: 25), Kraakman et al. (2004: 13).
  26. ^ Kikusawa (2004: 215-18).
  27. ^ Iwata (2007: 70-71), Kikusawa (2004: 219).
  28. ^ Iwata (2007: 208).
  29. ^ Kikusawa (2004: 247).
  30. ^ Iwata (2007: 22, 123-26).
  31. ^ Iwata (2007: 61-62, 128-50).
  32. ^ Iwata (2007: 28, 173-76).
  33. ^ Tamura (2002: 21-22, 44).
  34. ^ Kikusawa (2004: 50), Tamura (2002: 39).
  35. ^ Kuronuma (2009: 91-92).
  36. ^ Tamura (2002: 38).
  37. ^ Tamura (2002: 51-52).
  38. ^ Japan Business Federation (2006: 1 (2)).
  39. ^ Kuronuma (2009: 92), Tamura (2002: 52).
  40. ^ Tamura (2002: 50, 52-54).
  41. ^ Kikusawa (2004: 57-58, 90), Tamura (2002: 54-55).
  42. ^ Kikusawa (2004: 90-94), Tamura (2002: 55).
  43. ^ Kikusawa (2004: 55-56), Tamura (2002: 56-57).
  44. ^ Kikusawa (2004: 24-25).
  45. ^ Kikusawa (2004: 61-62).
  46. ^ Kikusawa (2004: 110).
  47. ^ Kikusawa (2004: 111-12).
  48. ^ Kikusawa (2004: 112-13).
  49. ^ Kikusawa (2004: 114), Tamura (2002: 76-78).
  50. ^ Kikusawa (2004: 114-18), Tamura (2002: 84-85).
  51. ^ Tamura (2002: 85-92).
  52. ^ Tamura (2002: 92-94, 114-27).
  53. ^ Kikusawa (2004: 30-31).
  54. ^ Kikusawa (2004: 31), Tamura (7-8).
  55. ^ Tamura (2002: 156-61).
  56. ^ Tamura (2002: 161-71).
  57. ^ Kikusawa (2004: 32), Tamura (2002: 186-87).
  58. ^ About the start of business of HR Governance Leaders Co., Ltd. --HR Governance Leaders Co., Ltd.
  59. ^ "Outline of "Company Law"”. Civil Affairs Bureau, Ministry of Justice. 2009/5/19Browse.
  60. ^ Kanda (2009: 191-92).
  61. ^ Kanda (2009: 191).
  62. ^ Tamura (2002: 109-12).
  63. ^ Kanda (2009: 191, 222-23).
  64. ^ Kanda (2009: 192, 227-28).
  65. ^ Kuronuma (2009: 75-76).
  66. ^ "Listed Company Corporate Governance Principles”. Tokyo Stock Exchange (March 2004, 3). 2009/5/15Browse.
  67. ^ Japan Business Federation (2006: 1 (1)).
  68. ^ "Report on Corporate Governance”. Tokyo Stock Exchange (March 2008, 9). 2009/5/15Browse.
  69. ^ Study Group on Disclosure and Evaluation of Corporate Behavior (August 2005, 8). “Disclosure / Evaluation Framework for Corporate Governance and Risk Management / Internal Control-Guidelines for Construction and Disclosure-". 2009/5/11Browse.
  70. ^ Machida (2008: 238-40).
  71. ^ "[Japan] Financial Services Agency and TSE officially decide to apply Corporate Governance Code”. Sustainable Japan (March 2015, 3). 2015/3/9Browse.

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