2002 Reports

The irresponsible Japanese top management under the cross-shareholding arrangement

Sase, Takao

"The principles of Japanese social structure can be seen clearly portrayed in the
household structure, and the internal structure of the various groups in Japan is vertical.
Kaisha (a company or a corporation) is not an exception. Key characteristics of corporate
governance in Japan are the lifetime employment mores for larger corporations with the
seniority system, company-wide labor organizations and the cross-shareholding arrangements
among corporations that center around main-banks. The Japanese corporate governance
promoted economic growth but lacks an effective brake, because of the cross-shareholding
arrangements. This is the big defect of Japanese-style capitalism."