The Effect of the 2015 Revision to the Corporate Governance Code on Japanese Listed Firms

2022 Fiscal Year Final Research Report

• Project/Area Number: 20K22100
• Research Category: Grant-in-Aid for Research Activity Start-up
• Allocation Type: Multi-year Fund
• Review Section: 0107:Economics, business administration, and related fields
• Research Institution: Tokyo University of Science
• Principal Investigator: Yanagida Tomotaka 東京理科大学, 経営学部経営学科, 講師 (40876249)
• Project Period (FY): 2020-09-11 – 2023-03-31
• Keywords: 社外取締役 / コーポレート・ガバナンス・コード / 取締役構成 / 女性取締役 / ファミリー企業 / ソフトロー

Outline of Final Research Achievements

The Corporate Governance Code, revised in 2015, recommends that the firms listed within the first and second sections of Japan’s Tokyo Stock Exchange select two or more independent outside directors (Corporate Governance Code 4-8). Japanese listed firms must either comply with or explain the reason for non compliance. This study investigates how the Corporate Governance Code affects Japanese listed firms. Using a difference in differences approach for our sample of 4,200 firm year observations from 2014 to 2015, we find that the Corporate Governance Code increases the proportion of outside directors by approximately 8.8%. This finding implies that such companies might have found it difficult to explain non compliance with this rule to their shareholders. Moreover, we find no evidence that increases in the ratio of outside directors are related to a firm’s future performance.

Free Research Field

会計

Academic Significance and Societal Importance of the Research Achievements

本研究は日本におけるCGコードの改訂を踏まえ、社外取締役の取締役会比率の変化とその経済的影響について報告している。社外取締役の企業業績に与える影響について混在した結果が先行研究によって報告されている中、社外取締役数の増加が業績向上に影響を与えないという新鮮な証拠を提供している。