Does corporate board downsizing increase shareholder value? Evidence from Japan

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19 Citations (Scopus)


Japanese firms that have traditionally had large boards have recently become subject to pressures for small boards. This study shows that Japanese firms that substantially decreased board size tended to adopt an officer system and so did not substantially decrease the size of the management team (executive officers and directors). This tendency is especially evident for high-performing firms that face less information asymmetry. Japanese firms endogenously choose the change in the management team size when downsizing their boards. Firms that downsize boards do not show performance improvements, suggesting that board downsizing does not necessarily raise shareholder value.

Original languageEnglish
Pages (from-to)562-573
Number of pages12
JournalInternational Review of Economics and Finance
Issue number4
Publication statusPublished - Oct 2011

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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