CIRJE-J-237 『経営者、社外取締役と大株主は本当は何をしていたか?:東京海上・大正海上の企業統治と三菱・三井』
"What Did Corporate Executives, Outside Directors and Large Shareholders Really Do ?: Corporate Governance of Tokyo Marine and Tasiho Marine in Mitsubishi and Mitsui Zaibatsu"
Author Name 岡崎哲二 (Tetsuji Okazaki)
Date October 2011
Full Paper PDF file (only Japanese version available)
Remarks  
Abstract (Japanese) Abstract (English)


This paper addresses a fundamental question on corporate governance, "What did corporate executives, outside directors and large shareholders really do ?" Although this question is essential, it has not been fully addressed in the literature, basically due to the constraint of relevant materials. This paper overcomes this problem by using a detailed diary written by Hachisaburo Hirao, who worked for many large companies, including Tokyo Marine and Fire Insurance Co. and Taisho Marine and Fire Insurance Co. in prewar Japan. In this diary he described in detail how corporate executives, outside directors and large shareholders thought and acted. Based on this diary and other related materials, it is revealed that in Tokyo Marine and Fire Insurance Co. and Taisho Marine and Fire Insurance Co., planning and implementation of managerial policies were basically entrusted to their corporate executives. This means that there existed agency relationships between shareholders and corporate executives. Meanwhile, the agency problem was resolved through a voice mechanism from outside directors representing large shareholders and large shareholders themselves to corporate executives. Outside directors and large shareholders indeed gave advice, pressure and ratification on managerial policies. These findings imply that these companies were governed by a typical Anglo-Saxon mode of corporate governance.