Establishment of Corporate Governance Code and Problems of ROI's Use

Abstract

Japanese Government announced Corporate Governance Code on July 2016. One of the theoretical support of this corporate governance code is known as Itoh Report. Itoh Report offered that Japanese corporations should commit ROE over 8%. The recommendation gives shareholders too much benefits, but it has possible risk of distorting continuous development of Japanese corporation. This paper ends up by suggesting countermeasures for Japanese corporations.