Professor Saori Nara of the School of Commerce, Meiji University found that the higher the ratio of outside directors in a private company, the more information about management is disclosed.The results of the research were published in the December issue of the "Securities Analyst Journal" because the results were the same as in the Western survey, in which the Corporate Governance Code, which is a mechanism for managing and supervising corporate management, was introduced earlier than in Japan.
According to Meiji University, the Corporate Governance Code was introduced in Japan in 2015, and many listed companies have actively promoted outside directors.In response, Professor Nara analyzed the relationship between the ratio of outside directors of listed companies and information disclosure.
When Professor Nara compared the ratio of outside directors with the four items related to information disclosure, such as the attitude of management to disseminate information, it was found that the higher the ratio of outside directors in all items, the more information disclosure progressed.Professor Nara believes that recent efforts to actively appoint outside directors have led to improved information disclosure by companies and fostered a favorable information environment for investors.
Previous research in Europe and the United States has revealed that companies with a higher ratio of outside directors are more likely to disclose information because outside directors cannot provide supervision and advice unless they obtain sufficient information.Although such research has not been sufficiently conducted in Japan, it has been found again that the results are similar to those in Europe and the United States.The results of this research are likely to attract attention as they have certain implications for issues that companies should tackle.
