This year, Japan’s Governance reform drive will either keep going, or run out of steam. Judging from the amendment of the Company Law that is now underway by an advisory council of the Ministry of Justice (MOJ), the latter is likely.  Strikingly absent is a clear over-arching vision of the most important themes that amendment of the Company Law should address now that the country has a Corporate Governance code. In other words, what is missing, that can only be addressed via the Company Law? If the government were truly intent on bringing about behavioral change on the part of all Japanese boards and executives, it would focus on harmonizing key aspects of the confusing array of three different corporate governance models which listed companies can adopt, and moving towards a more consistent version of the “monitoring model” for governance that has become internationally accepted and is now embodied in its own corporate governance code.

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