After the establishment of Kishida Cabinet that suggested the “new capitalism”, the corporate governance reforms in Japan entered the new phase. The task that the reform faces should be dual and layering; to realize technological innovation and economic dynamism by strengthening the role of the capital market without falling into the trap of short-termism and to establish a framework for companies to internalize the social values and sustainable development. Put it differently, the goal is not to move simply closer to the U.S. governance model or to revive the traditional Japanese model, but to newly design a “Japanese model 2.0.” It would be a hybrid of those two models. From those perspectives, this short report first summarizes the economic consequences of the corporate governance under Abenomics. Then, it suggests crucial focal points for designing Japanese model 2.0, emphasizing the redefinition of the purpose of Japanese firms, and an appropriate ownership structure that could support the purposeful corporation. Lastly, it outlines the recent “quiet” changes of ownership structure in the 2010s based on my current research.
