1 of 4 Directors at Japan Inc. Now Comes From the Outside

Corporate Japan now has more than 7,000 outside directors on its boards. That is one of every four and up by about 1,000 from around the same time last year. According to Tokyo Stock Exchange data, the number of outside directors totaled 7,270 as of Friday, representing 25% of the combined total of directors at all listed companies. The ratio of outside directors still lags that of the U.S. and Britain, where such directors represent the majority. But analysts said Japanese companies are increasingly listening to shareholders when it comes to corporate governance issues. The data shows that 96% of all listed companies now have at least one outside director. The figure drops to 70% for companies with two or more such directors. Of companies listed on the TSE’s first section, 86% have at least two outside directors. Analysts said the jump in the number of outside directors was prompted by the corporate governance code that the country introduced last summer. The code calls on businesses to appoint at least two highly independent outside directors.

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