1. Outline of the views

To allow the Japanese economy to thrive over the medium to long term, the government should review the corporate legal system from the following three perspectives so that the system will be able to contribute to stronger international competitiveness and a vibrant capital market, as part of Japan’s growth strategy.

(1) Support for corporate reorganization and M&A

Encouraging companies to effectively make tender offers using their own stock, creating a system whereby a company can be safely and quickly turned into a wholly owned subsidiary (squeeze-out), preventing the abuse of appraisal rights, etc.

(2) Promotion of operation capitalizing on the corporate group’s total capacity

Establishing a company-appointed director system that requires no general meeting procedures for individual appointments, exempting wholly owned subsidiaries from the need to appoint a kansayaku (company auditor), etc.

(3) Higher “resilience” with improved corporate governance

Facilitating the introduction of outside/independent directors/kansayaku, diversifying options of board structure of companies, etc.

For more information, please see “Future Direction of the Corporate Legal System.”

2. Background

In February this year, the Legislative Council of the Ministry of Justice was consulted about the review of the corporate legal system, and deliberation on it started on April 28 by the Working Group on the Corporate Legal System. METI’s views announced today were officially presented at the third meeting of the Committee held on June 23.

<Appendices>

• “Future Direction of the Corporate Legal System (Summary)” (PDF:101KB) Updated on July 6, 2010
• “Future Direction of the Corporate Legal System” (PDF:1,169KB) (in Japanese)

June 23, 2010

Corporate System Division, Economic and Industrial Policy Bureau