International Comparison of Corporate Governance

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We investigated several important factors of corporate governance within an international comparison perspective. They include a) auditing, disclosure and corporate low systems and b) ownership and financial structures and board composition (we described the former as "system side" and the latter as "practice side" of corporate governance respectively). In addition, we explored the relationship between corporate governance and performance. Our ultimate goal was to find out what kind of governance structure corporations should have to realize best performance.The following findings were obtained:1. There is no unique solution of corporate governance structure which brings best performance to every corporation.2. The direct implication of the above statement is that "global standard" of corporate governance cannot exist. Corporate and financial systems, culture, and historical path of each country have great influence on the effectiveness of governance of local corporations. It is necessary for government authorities, corporate executives and academics to cooperate to device corporate governance platform in their country on which local corporations establish the best performing governance structure.3. Governance platform alone is not sufficient for individual firms to attain good performance. The effectiveness of their governance structure is closely related with how and by whom the structure is operated; who holds real power in and around the corporation; what kind of organizational structure it has; and what kind of industry (technology/market) it belongs to.4. The relationship between corporate governance and performance is not static but dynamic. In other words the optimal governance structure at one time can deteriorate as time passes. One of the reasons for this is environmental changes such as shift in Japanese financial market and corporate financing from indirect finance, causing main bank monitoring to dysfunction.