I would like to introduce two examples of an ambiguous Japanese law which is not the only one reason of business delinquency ( so called business moral hazard in Japan ) but is deeply relative to the disorder of Japanese business ethics. Japanese laws regulating a type of cartels are made under different normative standards. The type of cartel is called DANGO ,the bid rigging. The principle of Antimonopoly Law is basically same in Japan as in the U.S. and other advanced countries that cartel formation is illegal regardless of whether it brings good results or not. The Penal Code specifies the bid-rigging is guilty only with the purpose of impairing fair prices or obtaining illicit profit. According to the Commercial Code of Japan, the board of directors is in charge of control of business management ,as reportedly specified in the US laws. Auditor(s) has also a similar function for the control of management. Where there is overlap of the powers, both are unfunctionable due to conflict of attribution. It seems the existence of auditor causes directors less interested in the legality of management.
