Relation between board composition and firm performance in Japan

This paper presents an examination of the relation between firm performance and board structure in Japan in the early 1990s, considering some other Japanese corporate governance mechanisms such as financial keiretsu. These analyses reveal two salient results. First, a U-shaped relation is apparent between board size and firm performance in Japan, as exists in the U.S. Therefore, very large or small boards are better for firms in Japan. Second, we can find no significant relation between Japanese corporate governance features such as financial keiretsu and firm performance during the early 1990s.