Publication Type
Journal Article
Version
acceptedVersion
Publication Date
3-2005
Abstract
The board of directors plays an important role in solving the agency problem between shareholders and management. This paper investigates the relationships between ownership and board structure with the diversification strategy of large Japanese firms. The results show that corporate nominee directors are associated with lower levels of product diversification of their investee firms. This suggests that nominee directors in large Japanese corporations see themselves representing specific interests and therefore investors should pay attention to board composition in order to assess the level of protection they can expect to receive. Even without any apparent agency problem with management, there remains a potential “principal-principal” problem.
Keywords
Corporate governance, ownership structure, board of directors, diversification, Japanese firm
Discipline
Asian Studies | Business Law, Public Responsibility, and Ethics | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Corporate Governance: An International Review
Volume
13
Issue
2
First Page
303
Last Page
312
ISSN
0964-8410
Identifier
10.1111/j.1467-8683.2005.00424.x
Publisher
Wiley
Citation
Yoshikawa, Toru and PHAN, Phillip H..
The effects of ownership and capital structure on board composition and strategic diversification in Japanese corporations. (2005). Corporate Governance: An International Review. 13, (2), 303-312.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/2720
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Included in
Asian Studies Commons, Business Law, Public Responsibility, and Ethics Commons, Strategic Management Policy Commons