The English-language JAPAN Forward series The Only Way to Survive for Japan concluded in December 2025. Written by Shin Ushijima, a veteran internationally oriented lawyer with decades of experience in corporate legal affairs, the series consolidates 110 columns into four chapters that distill his deep expertise in corporate governance and practical insight.
Each section and chapter stands on its own. Yet, taken together, they form an indispensable compass for business professionals. Some of the prescriptions are uncomfortably candid, but all amount to messages addressed squarely to those engaged in corporate life.
That this first-rate analysis of corporate governance has been delivered to a global audience in English is significant. It offers business leaders abroad a clear signpost for understanding the current realities and challenges facing Japanese companies today.
Read Shin Ushijima's series: 'The Only Way to Survive for Japan'
Kobayashi Pharmaceutical's Supplement Issue
Among the columns, the issue to which Mr Ushijima devotes the greatest attention is that of outside directors. While their numbers have risen sharply in recent years, criticism remains persistent. Many are said to be "non-functional" or "outside in name only." Mr Ushijima confronts this reality head-on, yet refuses to abandon a clear sense of what outside directors ought to be.
A clear example appears in Chapter 1.4 in the section titled "'Quantity' and 'Quality' of Outside Directors," dated July 2019. A sentence set in bold captures his core concern: "To attain proper functioning of the board, discussion should be focused on how to provide the right information to outside directors in a timely manner."
That line immediately brought to mind the controversy surrounding health damage linked to KOBAYASHI Pharmaceutical's red yeast rice supplements.
The first report of health damage reached KOBAYASHI Pharmaceutical on January 15, 2024, when a doctor in Kyushu warned that a patient who had taken the supplement had developed acute renal failure. Similar reports soon followed. Yet the company did not make a public announcement or call for consumers to stop taking the product until March 22. Outside directors were notified only on March 20, just two days earlier.
A matter of critical importance was thus kept beyond the reach of those charged with independent oversight. The result was a serious failure of judgment that allowed the damage to spread. One cannot help but wonder whether this outcome might have been avoided had the company taken to heart a column written five years earlier.
The Fuji Television Case
In the Chapter 1.1 section titled "Concerns About a Trend to Employ Outside Directors Just to Make Up the Number," Mr Ushijima emphasizes that "outside directors should be duly qualified so that they can properly perform their roles and responsibilities." Similarly, the section "Managerial Accountability of Outside Directors" in Chapter 1.7 underscores the point even more bluntly: "Truly competent and helpful outside directors are the linchpin of corporate governance."
These passages naturally led me to reflect on Fuji Television, which in 2025 became the most prominent corporate governance case in Japan.
Fuji Television and its parent company, Fuji Media Holdings (FMH), came under fire amid allegations that influential adviser Hisashi Hieda effectively controlled executive appointments. At the time, FMH's board comprised 17 directors, seven of them independent outside directors, more than sufficient on paper. Yet a third-party investigative report concluded that they were, in practice, entirely nonfunctional.
Of the seven outside directors, three were senior executives from Toho, Bunka Broadcasting, and The Sankei Shimbun, companies that were major shareholders or core group firms, and which had long treated these positions as de facto "designated seats" for their chairmen or presidents.
The remaining four included a former senior official of the Ministry of Internal Affairs and Communications, the honorary chairman of Kikkoman, a former president of the Tokyo Stock Exchange, and a special adviser to ANA Holdings. It was an impressive roster on paper, yet none played a meaningful role. Ultimately, individuals with the requisite independence, motivation, and substantive capacity were simply not selected.
Choosing the President Is Governance
Corporate governance is typically rendered in Japanese as kigyo tochi. According to the Financial Services Agency, it is defined as "a structure for transparent, fair, timely and decisive decision-making by companies, with due attention to the needs and perspectives of shareholders and also customers, employees and local communities." Though comprehensive, the definition is hardly concise.
By contrast, Mr Ushijima cuts directly to the core in the book's preface: Selection of the president is a matter of corporate governance. Companies are the primary creators of social value, and their direction is shaped decisively by those who lead them. For that reason, he argues, establishing a system capable of reliably selecting a president suited to the demands of the times is essential.
For decades, Japan's listed companies have largely allowed sitting presidents to choose their successors. Inevitably, this process invites self-preservation and risks insulating leadership from shifts in the business environment or broader societal change. Mr Ushijima, therefore, calls for the effective use of genuinely independent outside directors, those capable of exercising objective judgment, to play a central role in succession decisions.
Predicting the Ghosn Scandal?
I also came across a particularly striking passage. In Chapter 2.1, Why Pay Directors, Mr Ushijima asks, What is the purpose of paying high compensation to directors?"
Written four years before the scandal involving former chairman Carlos Ghosn, Mr Ushijima examines Ghosn's enormous compensation and the logic of performance-linked executive pay. He concludes with a prescient warning: "Even the top executive is nothing more than an ordinary person like a hundred thousand other ordinary people. If he/she sees his/her compensation increase along with a rising stock price, possibly he/she may err in sorting out his/her priorities."
Events would prove him right. Former Chairman Ghosn appeared to place greater emphasis on preserving his own position and remuneration than on improving Nissan's performance or contributing to Japanese society.
A Governance Guide Grounded in Reality
The foundations of this book lie in the "Economic Meteorological Observatory" column published in the Asahi Shimbun's business pages, as well as the online media outlet Japan In-depth.
The "Economic Meteorological Observatory" features contributions from some 20 business leaders and university professors. Mr Ushijima contributed to the column for seven and a half years beginning in 2014, writing at a pace of roughly once a month. Bringing these pieces together in a single volume and reading them side by side brings their cumulative value into sharper focus.
As the subtitle suggests, governance is the source and backbone of corporate activity. It is therefore no surprise that an abundance of books on corporate governance already exists, spanning fields from company law to accounting and auditing. Many, however, remain abstract, devoting most of their pages to institutional explanations.
This book is different. Each column engages directly with real-world events and legal or regulatory changes, such as amendments to the Companies Act and the Financial Instruments and Exchange Act, drawing out concrete lessons and unresolved challenges in corporate governance. One cannot help but hope that it finds a wide readership among managers and working professionals, both in Japan and abroad.
RELATED:
- PREFACE | The Only Way to Survive for Japan: Corporate Governance is Sure to Save Our Country
- Chapter 4.4 Corporate Governance and Choosing the Right Outside Directors
- At Struggling Nissan, Ghosts of Ghosn Incident Hinder Management
Author: Hironori Kato, Journalist
