A Comparative Analysis of Corporate Scandals under Japanese and American Corporate Law
Michael Anthony DeCesare

This paper focuses on corporate governance in both Japan and the United States and discusses ways in which their systems ought to converge. In particular, corporate scandals are examined in each nation with special attention being paid to the Olympus Scandal in Japan and the collapse of Bear Sterns in the United States. Discussing and analyzing these corporate scandals will reveal weaknesses in each of their systems and show how systematic failures caused these infamous scandals to fester and ultimately burst onto the global market. The importance of the study is highlighted is to show that neither the United States nor Japan have a system of corporate governance that is ideal nor there are noticeable flaws and shortcomings within each country. As globalization marches forward, it becomes more necessary to examine other countries‟ systems of corporate governance and in this way move towards a “convergence” of corporate governance. This paper finds that the Japanese system of corporate governance is moving in a way that seems to be more like that found in the United States. The inverse of this is true as the United States is also changing in a way towards the system found in Japan. The paper finds that while corporate governance is changing in both of these countries, they are not moving to mimic or imitate other systems of corporate governance. Indeed, close study of corporate governance within these two countries would indicate that they seem to be heading towards a convergence, a “hybrid model”, ideally taking the most successful parts of each system. To put this all into perspective, it is first necessary to acquire a rudimentary knowledge of the basic tenants of corporate governance in both Japan and the United States. Practically, these findings will show that the current status quo of corporate governance is not ideal. Particular attention is paid to Olympus and Bear Sterns. Each of these scandals rocked the entire business world of their respective countries. Analyzing what went wrong and implementing policies to prevent or mitigate scandals like this from occurring again is necessary to understand. Theoretically, having many different systems of corporate governance is not ideal in an increasingly globalized world. This paper shows how convergence has been occurring and what should be done to further prod this process along.

Full Text: PDF     DOI: 10.15640/jirfp.v6n2a1