The Japanese economy had failed to see its recovery during and past so-called‘ lost decade’ since 1990s and the country recently started to see signs of its economic turnaround and competitiveness improvement. Despite critics of sluggish progress in its structural reform in the past that prevented the economy getting out of recession phase, robust efforts by the Koizumi government to push for structural reform and deregulation paved the way for bringing economic revitalization to the nation. 

Following the introduction part (chapter one), the study endeavored to look at the country’s attainment of economic recovery through enhancement of vitalizing corporate activities in the second chapter. Governmental policies concerning structural reform and lessened regulation pursued over the past 5 years vary in many respects, but have in common in that they mainly focused on ways to provide a greater vitality to corporate activities in the country. The principal aim of such policies was to abolish decisively or place an ease on rules and laws which were considered to hinder corporate activities working smoothly, or not helpful for their global business expansion.

In terms of relaxing control over corporate activities, the government tried to maximize effects of regulatory reform by getting rid of existing restrictions in core areas, including restrictions associated with conglomerates, municipal development, labor market and environment. Considering Korean government which has been pursuing deregulation of removing obstacles to corporate activities, but failed to tamper elements of comprehensive and collective regulations, significance of the Koizumi government’s regulatory reform lies in its successful inclusiveness of some critical restrictions.

The third chapter looked at ownership structure of Japanese enterprises and regulation over equity investment to other businesses. In Japan, amechanism that had long secured stable ownership of stocks among companies gradually disappeared and in response, the Japanese Fair Trade Commission made a bold movement to eliminate are striction on total amount of stockholding. Under the situation that cross-shareholding system still stands, such move was intended to free up equity investment by companies lifting ceilings imposed on a company’s equity investment ratio of up to 100% to assets.

In case of Korea, limitation on total amount of equity investment was extensively relieved in 2007, but the limitation on highest ceiling of equity investment still exists. The cross shareholding system which is prevalent in Japan is limited only to small businesses selectively here. A group of top businesses in the country are fully subject to prohibition of cross shareholding and limitation on total amount of equity investment. With regard to limitation on equity investment, its progress, compared to Japan, in relieving the regulation can be perceived more protracted. 

The fourth chapter focused attention on executive officer system that the Japanese firms have pursued as part of efforts to bring a restructuring into the mechanism of board of directors. In the boardroom reform, Japan introduced a governance system just like other Western developed countries have, at the same time it maintained a traditional form of board of statutory auditors, and  leave decision of establishing the Western-style audit committee to company itself. In addition, in neither board of statutory auditors nor audit committee, a role of outside directors is critical.

The presence of executive officer system is not aimed at strengthening regulations and responsibility, but enhancing managerial efficiency on a corporate level by separating execution function from supervisory one. Hence, operation of executive officer system should depend on the situation of an individual company. only when the executive officer system is one option that can be freely chosen from various forms of boards of directors, strategic complementarity among each system is sure to be secured.

The fifth chapter focused on Japanese policy change related to promoting M&A markets and defense for control of the company. The Japanese government made a shift toward improving decision making process during which companies are allowed to ensure autonomy and diversity by amending commercial law and enacting new corporate act. It especially put a lot of efforts to put forth a set of guidelines on fair and rational defense measures.  Based upon the guidelines, it introduced advanced safeguard measures against hostile takeover, equivalent to western standards and encouraged companies to utilize them.

Standards for both preventive measures against hostile M&A attempts and their abuse must be established in the expansive aspects. Just like the Japanese case, Korea needs to have such preventive measures in place, which are designed to play an act in case of urgency. When the introduction is made, guidelines to hold abusive use of defense measures in check are required to be given exhaustive consideration and its settlement in society as a rule must be a prior condition.