Reforming Corporate Governance and Employment Relations  

Oleh:

Osano, Hiroshi ; Kobayashi, Mami

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Japan Labor Review vol. 2 no. 1 (2005), page 58-80.
Topik: employment; corporate governance; employment relations
Fulltext: Hiroshi Osano.pdf (92.75KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ134.2 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Before discussing the impact that reform of corporate governance has on company - employee relations it is necessary to clarify the goal of corporate governance. When considering this question, the mass media and others unseriously place emphasis on the interests of shareholders, while some academics, equally irresponsibly, stress the importance of stakeholders and are dismissive of the interests of shareholders. The latter assertion gains persuasive power when remembering the argument that excessive importance placed on shareholders triggered a recent series of accounting scandals in the U. S. However, importance placed on shareholders is less inconsistent with the long - term interests of other stakeholders, and also increases the transparency of its function as a benchmark of corporate governance. Hence, this article attached long - term importance to shareholders’ interests as a benchmark in determining the long - term aims of corporate governance. This article, while noting possible future directions for corporate governance in reaction to ongoing external changes, aims to clarify which company - employee relationship is compatible with such changes. As a first step in preparing for the discussion, significant changes in external conditions faced by the Japanese economy are noted, including the transformation of the financial system consequent to changes in the nature of the main bank system and the unwinding of cross - shareholdings; the transformation of production technology and organization following the evolution of module and openness methods; demographic changes, mainly fewer young people and an increase in the elderly population; changes in the quality of workers as symbolized by educational problems; intensifying international competition; and frequent corporate scandals. Changes in corporate governance in response to these external changes can be classified in two ways : changes in external and internal governance. The former refers to the rules which corporate management must observe at the request of outside creditors and shareholders who have come into existence due to changes in patterns of debts and share ownership. Internal governance, on the other hand, means the rules which corporate managers must observe within the mechanism of the organization, such as the board of directors, contracts concerning remuneration for management or shareholdings by business managers, choosing between a divisional structure and a company system, and so on. Company - employee relations should be reformed in line with the dominant changes in external and internal governance, otherwise there will be a gap between the form of corporate governance and the employment relationship, which in turn will undermine the efficiency of the firm. This article examines a desirable approach to employment relations from the following perspectives : (i) the necessity of devising new incentives for employees; (ii) consistency between protection of employees’ assets and the new incentives; (iii) increased mobility of the labor market and the internal promotion system; and (iv) corporate scandals and the whistleblowing system.

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