Christopher Langner is a markets columnist for Bloomberg Gadfly. He previously covered corporate finance for Bloomberg News, and has written for Reuters/IFR, Forbes, the Wall Street Journal and Mergermarket.

There's one thing Japanese Prime Minister Shinzo Abe could learn from a Korean woman: respect -- for minority shareholders, that is. President Park Geun Hye's push for better corporate governance at the nation's largest conglomerates is bearing fruit, and exciting some of the world's biggest investors.

Last week,  Samsung Electronics, by far the biggest member of the country's $1 trillion Kospi stock index, adopted a proposal to allow non-CEOs to take up the chairman's role for the first time, while Hyundai Motor pledged to strengthen transparency. The moves drew praise from Mark Mobius, the executive chairman of Templeton Emerging Markets Group at Franklin Resources. Across the strait, only 1 percent of Japan's Topix 500 companies have ``good'' board structures, Jefferies analyst Zuhair Khan said in a note Tuesday.

Among Khan's conclusions: fewer than 5 percent of Japanese companies have a majority of outside directors, and only 2 percent have outside chairmen, or nomination, audit and compensation committees that are headed by an outsider. There are also more academics and retired bureaucrats on boards in Japan than there are finance professionals, accountants or strategy consultants combined. ``Despite a history of accounting scandals, still only 10 percent of companies have an outside director with an accounting background and barely 25 percent of boards have a director with a legal background,'' he wrote.

Forget diversity, too.

As Bloomberg Gadfly's Andy Mukherjee recently noted, Japan Inc.'s lack of gender variety in top corporate jobs is by far the worst in the Group of Seven nations. Maybe that explains why the Topix is down 14.6 percent over the past decade on a dollar basis, making it one of the worst performers among developed-nation exchanges. Adding in dividends, the index returned 3.4 percent, lagging almost all other advanced economies.

Pretty Dismal
Japanese stocks are down about 12 percent over the past 25 years and 14.6 percent over the past decade
Source: Bloomberg

There's no doubt that within the developed world, Japan has the worst governance metrics:

Too Cozy
Just 18 percent of companies in Japan have board members who are independent from management
Source: Bloomberg
* Average of available information for 5,000 largest publicly traded companies in each country.

Japan is actually doing better than South Korea in one area -- its boards have more women, just. But at 2.7 percent versus 2.3 percent, the participation of females in corporate decision making is so small in both countries that comparing them seems wrong:

Gender Issues
Japan is only (slightly) better than South Korea when it comes to having women on company boards
Source: Bloomberg
* Average of available information for 5,000 largest publicly traded companies in each country.

Besides, South Korea elected a female leader and she's already changing the general attitude toward transparency. Perhaps that's what Japan needs, a woman in power. 

One thing is for sure, Japanese investors continue to nurse losses in spite of negative interest rates and multiple measures to spur economic growth. Maybe it's time for Abe to direct an arrow toward corporate governance. Structural reform is badly needed, and it has to start from the top. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Christopher Langner in Singapore at

To contact the editor responsible for this story:
Katrina Nicholas at