The cover story for the Nikkei Business magazine last month was on Japanese corporate governance, specifically focusing on what makes for effective use of outside directors (and citing Sony as a case of ineffective use of outside directors).

One of Japanese prime minister Abe’s policies for strengthening Japanese corporate governance has been to introduce a comply-or-explain regulation for any company listed on the Japanese stock markets with less than one outside director on its board.  The Nikkei notes that in other countries such as the USA, UK, France and Germany, regulations are stricter, requiring comply-or-explain for boards with less than half the directors as outside directors, in most cases.

Some other statistics caught my eye:

• Outside directors of listed Japanese companies who have board level experience elsewhere – 38.1%
• Average time served as director – 4 years
• Average salary – Y12m (not much more than US$100K)
• Female directors are 6.5% (159 directors) of the total
• Foreign directors are 2.9% (70 directors) of the total
• They spend around 10-11 hours a month on their directorial duties

Best paid directors overall for Japanese listed companies:

1. Carlos Ghosn – Nissan (US$9m)
2. Frank Morich – Takeda Pharma (until April 1 2014) (US$9m)
3. Kohji Tanabe founder of U-Shin (automotive and industrial equipment) (US$7.6m)
4. Kazuo Okada founder of  Universal Entertainment (Pachinko) (US$7.4)
5. Tadataka Yamada – Takeda Pharma (US$7.4m)

Other foreigners in the top 30 include Timothy Andree at Dentsu (advertising agency), Roger Barnett at Shaklee (nutritional supplements company which was majority owned by Japanese pharmaco Yamanouchi and is still listed on JASDAQ), Carsten Fischer at Shiseido and Ronald Fisher at Softbank.

Companies with the most directors earning over Y100m (US$900K) were

1. Mitsubishi Electric (18)
2. Canon (12)
3. FANUC (automation products) (10)
4. Mitsubishi Corporation (8)
5. Mitsui & Co (8)
6. Nomura (7)
7. Toyota (7)
8. Daiwa Securities (6)
9. Itochu (6)
10. Nissan (5)

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Last updated by Pernille Rudlin at 2014-09-29.