Hedge Fund Activism in Japan: The Limits of Shareholder Primacy
Cambridge University Press, 5/24/2012
EAN 9781107016835, ISBN10: 1107016835
Hardcover, 388 pages, 15.3 x 2.3 x 2.2 cm
Language: English
Hedge fund activism is an expression of shareholder primacy, an idea that has come to dominate discussion of corporate governance theory and practice worldwide over the past two decades. This book provides a thorough examination of public and often confrontational hedge fund activism in Japan in the period between 2001 and the full onset of the global financial crisis in 2008. In Japan this shareholder-centric conception of the company espoused by activist hedge funds clashed with the alternative Japanese conception of the company as an enduring organisation or a 'community'. By analysing this clash, the book derives a fresh view of the practices underpinning corporate governance in Japan and offers suggestions regarding the validity of the shareholder primacy ideas currently at the heart of US and UK beliefs about the purpose of the firm.
List of figures
List of tables
Acknowledgements
Note on transcriptions of Japanese names
1. Introduction
hedge fund activism, Japanese corporate governance, and the nature of the company
2. Companies, company law, and corporate governance
3. The rise of shareholder primacy in America and Britain
4. The emergence of activist hedge funds
5. Firm-centric corporate governance
the evolution of the Japanese model
6. Japan's unexpected credentials as a target for hedge fund activism
7. The anatomy of hedge fund activism
funds, targets and outcomes
8. Two turning points
Bull-Dog Sauce and J-Power
9. Responding to activism
managers, investors, officials and the media
10. 'Quiet activism'
the future for shareholder engagement in Japan?
11. Conclusion
after shareholder primacy
Methodological appendix
Bibliography.
'Burrough and Helyar's Barbarians at the Gate now has a worthy successor. Buchanan et al.'s subtitle might be 'The Barbarians with a Foot in the Door'. The 'activist' American and European funds have acted as the advance guard of that 'pure' form of Anglo-Saxon capitalism which sees shareholder profit as the supreme good. Their descriptions of the funds' various raids on decently efficient but naive Japanese companies make fascinating reading, and their judgements are judicious.' Ronald Dore, London School of Economics and Political Science
'Quiet hedge fund activism has been more successful than noisy activism in Japan. Buchanan, Chai and Deakin show why, guiding us through the nuances of Japanese corporate governance. Perhaps their greatest achievement, though, is to further situate Japanese corporate governance as an understandable postwar response to the (universal) incompleteness of company law for joint stock companies, socially conditioned like the responses which created shareholder primacy and hedge fund activism in the US.' Hugh Whittaker, University of Auckland
'No-one, not even among Japanese scholars, has ever successfully uncovered the full story of hedge fund activism in Japan. This truly pioneering work depicts the eventual failure of confrontational hedge fund activism in Japan after its rapid rise and momentary success. The authors also shed light on the limitations of the shareholder primacy model, emphasizing the resilience of the Japanese 'firm-centric' corporate governance model in the recent unprecedented turmoil.' Takeshi Inagami, Professor Emeritus of Industrial Sociology, University of Tokyo
'Well-researched and illuminating.' Financial Times
'Even without an understanding of this literature, readers will of course find this book a treasure trove of stimulating ideas and will enjoy the anecdotes and examples introduced on nearly every page.' Administrative Science Quarterly