A multitude of corporate governance reforms were enacted in Japan from 1997-2005. As a result of one of those reforms, beginning in 2003 Japanese companies had the option of choosing a committee system of corporate governance, one partially modeled on the American system, rather than the auditor system.

On May 14, SPRIE Researcher Robert Eberhart spoke at a SPRIE seminar about his current research assessing the effect of the Japanese reforms and the question of whether the corporate system in Japan will ultimately be converging with the Western model.

We compared two groups of committee system and auditor system companies and found that the firms using committee system governance, the so-called American model, were significantly valued higher as measured by Tobin's q--thirty- and forty-percent higher.

In researching the performance of Japanese companies under the committee system, Eberhart's current study has found significantly (30%-40%) higher Tobin's q scores for those companies following the committee system over those following the auditor system. This observation seems independent of other financial variables differentiating these companies. The research focused on 63 companies in the pharmacueuticals, electronics, and machine industries.

Tobin's q is the ratio of a firm's market cap to the replacement value of its assets. Since the change in Tobin's q was immediate, based on monthly data, this suggests a change in market evaluation, Eberhart noted, since the asset value would not have changed so quickly.

One possibility, Eberhart ventured, is that by opening themselves up to the committee system, management is indicating a confidence in the veracity of the firm's fiscal monitoring system, and the market is responding to that confidence.

Eberhart concluded by noting that these results are preliminary and further research is necessary to precisely determine the nature of these performance differences.

New Beginnings, a nonpartisan policy study group of former senior U.S. officials and other experts on Korea, will discuss the results of President Lee's visit and the prospects for forging a real partnership with South Korea at the World Affairs Council, San Francisco on June 3.

Panelists:

Michael H. Armacost, former U.S. Ambassador to Japan and the Philippines, and former Under Secretary of State for Political Affairs; currently the Shorenstein Distinguished Fellow, Asia-Pacific Research Center (APARC), Stanford University

Evans J.R. Revere, President of the Korea Society, and former Principal Deputy Assistant Secretary of State for East Asian and Pacific Affair

Gi-Wook Shin, Director of Shorenstein APARC and Professor of Sociology, Stanford University

Daniel C. Sneider, Associate Director for Research, Shorenstein APARC, Stanford University, and formerly a foreign affairs correspondent and columnist

David Straub, Pantech Research Fellow at Stanford's Shorenstein APARC, and a former State Department Korean affairs director

Bruce Pickering, Executive Director of the Asia Society Northern California (moderator)

This event is co-sponsored by the Asia Society of Northern California and World Affairs Council.

Shorenstein APARC is pleased to announce that Alisa Jones has been chosen as the 2008-2009 Northeast East Asia History Fellow.

Alisa Jones received her MA from the School of Oriental and African Studies, University of London and her PhD from the University of Leeds. She has recently collaborated on various book projects addressing the role of history textbooks, historiography, and popular culture in shaping public memory and national identities across East Asia.

As the Northeast Asia History Fellow, Alisa Jones will be a resident at the center for one academic year. During her year at the center, she will be researching on issues of historical memory, identity, conflict and reconciliation in the Northeast Asian region. She will also teach a credited Stanford lecture or seminar course through the university's center for East Asian and present a lecture on her research topic.

This fellowship was made possible through the generosity of the Northeast Asia History Foundation

Ten 2008 POSCO NGO Fellows were selected by the Fellowship admission committee during the second POSCO NGO Fellowship Conference held on May 1 and 2 at the University of British Columbia, Vancouver.

George Washington University:

Ms. Gyung Lan Jung, Center for Peaceful Future of Korea

Mr. Hyun-Mo Choi, Korea Migrant Workers' Human Rights

Indiana University:

Mr. Seoung-Hwan Jeon, National Council of YMCAs of Korea

Mr. Jae-Seok Kim, Gwangju Citizen's Coalition for Economic Justice

Columbia University:

Mr. Tae Ho Lee, People's Solidarity for Participatory Democracy

Mr. Boyoun Joung, Korea Youth Corps

University of British Columbia:

Ms. Jeong Sook Park, Korean Women Link

Ms. Hee-Seon Jeong, Seocho Volunteer Center

Stanford University:

Ms. Hye-Jeong Kim, Korea Federation for Environmental Movement

Mr. Hyun Gon Jung, Korean Council for Reconciliation and Cooperation