Corporate Governance, ESG, and ‘New Capitalism’

Abstract

Abstract Corporate governance is a critical—and increasingly crowded—arena for corporate transformation, and for determining the future of Japanese capitalism. Japan’s Stewardship and Corporate Governance Codes have been progressively strengthened. The giant Government Pension Investment Fund (GPIF) helped to spread ESG in Japan. Shareholders and managers are exhorted to work together for medium to long-term ‘corporate value’, as well as sustainability, but do their interests really align that well? Reflections are offered from the turmoil engulfing Toshiba, setting the scene for a consideration of Keidanren’s ‘sustainable capitalism’ and Kishida’s ‘new (form of) capitalism’. Investor relations have become the core institutional nexus of Japanese capitalism, but this is not necessarily compatible with new capitalism’s emphasis on growth with distribution, investment in human capital, and rebuilding the middle class.