Land of the Falling Poison Pill: Understanding Defensive Measures in Japan

The advent of the “shareholder rights plan,” more popularly known as the “poison pill,” fundamentally altered the trajectory of American corporate governance. Intended to defend vulnerable boards from corporate raiders, the poison pill was embraced by U.S. managers in the 1980s as a lifeline in a sea of hostile takeovers. When pundits predicted an imminent wave of hostile takeovers in Japan in the mid-2000s, Japanese boards appeared to embrace the poison pill with equal enthusiasm.

Japan’s experience might have been evidence that corporate governance around the world was destined to converge on the American model – but for two inconvenient … Read more