Effect of Corporate Governance on Financial Performance in Publicly Listed Companies in Japan

Abstract

Purpose: The purpose of this article was to analyze effect of corporate governance on financial performance in publicly listed companies in Japan.

Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.

Findings: Corporate governance positively influences the financial performance of publicly listed companies in Japan by enhancing transparency, investor confidence, and operational efficiency. Strong board independence and shareholder rights contribute to better risk management and sustainable profitability.

Unique Contribution to Theory, Practice and Policy: Agency theory, stewardship theory & resource dependence theory may be used to anchor future studies on the effect of corporate governance on financial performance in publicly listed companies in Japan. Publicly listed companies should ensure diverse board compositions, including independent directors, gender-balanced representation, and expertise in finance, technology, and sustainability. Governments and regulatory bodies should work towards a unified corporate governance framework that aligns local and international governance standards.