One day, Japan's biggest overhaul of rules for companies in decades will make them more efficient. Right now it's making things worse.

So says Toshiaki Oguchi, part of a group handpicked by the government to give a verdict on how well new codes for investors and businesses are working. Companies are meeting the minimum requirements without giving it enough thought, says Oguchi. Different types of shareholders are taking a uniform approach to pressing businesses to improve profitability, which is wasting everybody's time, he says.

Prime Minister Shinzo Abe is seeking to strengthen the economy by getting previously silent investors to push cash-hoarding companies to boost returns. The country started a corporate governance code in June after introducing complementary rules for shareholders last year. Return on equity, Abe's key measure of whether the revamp is working, has plateaued after jumping earlier in his term. Oguchi says it will take time for firms and investors to move from formalities to substance.