At BDTI we liked these pieces written by Konsuke Matsushita so much that we (BDTI) jointly translated them and got permission from PHP Institute to re-publish.
It turns out that “the God of Japanese management” (and the founder of Panasonic) was leery of cross-shareholdings… and was rather modern in his thinking.
Summary by BDTI: ” In Mr. Matsushita’s eyes, corporations are not the property of presidents or executives, but of shareholders. At the same time, companies are also “public institutions” of society. Executives report their performance at the shareholders meeting every fiscal year, and when it is good, they receive praise and appreciation from shareholders. When performance is below expectations, executives should humbly accept the harsh complaints and criticism they receive. This is the way corporations were meant to be. Managers should never forget that shareholders are their masters. As for shareholders, for them it is important not to resort to short-term trading, but rather to maintain an undaunted stance and fulfill their role as the ”central actor” of the corporation. Shareholders’ behavior is admirable when they do not merely hold stocks and quietly receive dividends, but rather, when they warmly encourage and rigorously guide management with authority, and provide insights as shareholders…..”
Thanks are due to Sachiko Ichikawa, attorney in Japan and a member of the bar in New York, for leading the original translation of the first piece above.